Local banker discusses proposed changes to federal banking rules
LAWTON, Okla. (KSWO) - A proposal by the Biden administration could increase reporting requirements for banks nation-wide.
If the proposal was signed into law, banks would have to annually report on total inflows and outflows on accounts, both personal and business with account balances over 600-dollars.
According to the Biden Administration, the goal would be to collect taxes from wealthy individuals and businesses on income that is earned but goes unreported.
Liberty National Bank CEO Rick Walker said the 600-dollar threshold is simply too low.
“Really what they’re doing is there’s an implication that basically everybody is a tax cheat, and they’re casting this wide net out here to try to capture everyone instead of just going after the individuals that are maybe cheating the system,” Walker said.
Executive Director Alan Butler for the Electronic Privacy Information Center, a nonprofit organization that focuses on research and advocacy, said the threshold should be raised because it will not help close the tax gap that could potentially pay for the proposed infrastructure bill.
“Let’s say 10-thousand dollars pegged for inflation overtime, then that would be much more reasonable in terms of the type of accounts that are being identified there. I think still it would be best if it was limited to business accounts because really it’s about business income,” Butler said.
Butler said people with non-traditional bank accounts could really be at risk.
“Right now, you can sign up for peer-to-peer payment services without providing a social security and transfer low dollar amounts without any major imposition, and it doesn’t require you to give an entity your social security number. The problem there is the more and more often people required to give up their social security number, the more they are at risk of identity theft and fraud,” Butler said.
If the proposal passes, Walker said it would affect anyone who has a bank account along with those who work at a banking institution.
“Our core systems we use to track our customer’s information, and keep it all accurate on a day to day basis. It would have to go through massive changes which anytime there are those kinds of changes it leaves operational costs to the banks. Which eventually we have to pass along someway. In effect, it’s almost a new tax against the American people because it will increase our costs, and we’ll have to increase our service fees to coop with that,” Walker said.
The Washington Post reported Senate Democrats will be unveiling a scaled back version of Biden’s proposal on Tuesday.
The new proposal will instead require the provision of additional information for accounts with more than 10-thousand-dollars in annual deposits or withdrawals.
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