Insurance & Commerce- House

The very first listing there is a concurrent resolution representative hawk is going to be passing over that it's been determined by leadership that we would not be doing concurrent resolution so she refiled as a house resolution of the same content so representative hawk you're recognized to go to the end of the table to make your presentation. Yes ma'am sorry. Thank you Mr chairman everyone hear me okay quick pull the microphone and closer there we go thank you as many of you may be aware a recent conversations at the federal level I'm very concerning to us in Arkansas but also for every financial consumer in the country that would be affected by potential legislation that is being considered so you have before you a copy of the resolution I just wanted to also share and miss Laurie truncheon president and CEO of Arkansas bankers association is also on her way over here if we have any questions further for her so does let you know that but some the proposal in federal legislation would be that would be for any transaction over six hundred dollars would be need to be reported to the IRS and this is a major intrusion on consumer privacy for financial privacy it's also. Makes sense Excuse me it also makes it potentially available to hackers the IRS experience one point four billion cyberattacks annually and recently experienced the solar winds hack at which infiltrated no manners numerous government agencies including the treasury department so for the purposes of both being Adam. Very difficult for banks to implement this it's also a burden on taxpayers and an invasion of their consumer privacy. But see. The administration has failed to explain how this new information would be utilized to close the tax gap which is their X. reason for passing this legislation and that every American would sacrifice their financial product privacy to enable closer inspection for what they deem to be tax evaders it's still not clear how this would help them find those that are trying to evade taxes through this method so it's basically providing information that has no purpose to the IRS in determining a consumer's tax liability. So it's unprecedented generation of taxpayer information your relevant to the calculation of the taxpayer's taxable income being transmitted and stored in an uncertain environments with significant cost to taxpayers and financial institutions it also assumes that every taxpayer is potentially a tax evader which is a a huge leap in determination of what. Is probably not the case and so that the IRS is basically not showed the need for this either at the financial institution level or the individual consumer level. I have before me if you would like submitted a letter that was submitted to the commissioner for the Internal Revenue Service by Rick Crawford our first congressional district congressman and a letter submitted by all fifty states but was signed by the bankers association thank you for coming today and this Laurie tried stand as president and CEO of Arkansas bankers association a letter from the American bankers association a signed by all fifty states bankers association in opposition to this legislation potential legislation so our resolution before you today what would just state those facts in terms of how the house would be against such an intrusion and consumer privacy and a burden on our financial institutions which really bore a lot of the brunt of the pandemic and trying to get our PP loans out and a lot of things that they have helped our communities and businesses to stay afloat during this pandemic. If you have any questions and I would ask instruction if you would like to come or if you have any questions for either one of us okay. Members C. representative Hodges have questions. I do for for the thanks I say okay it makes you wonder at the end of the table just identify yourself for the record mistrusting. President CEO of the Arkansas bankers association. Thank you Mr this is am a banker and I'm just not very familiar with with this The revolution. And so can a lightning as far as banks concerns we'll have a resolution benefits but there are three main concerns about this the first one being consumer privacy this is going to report a whole lot more data than they already have the data that they do have they don't use that they say this is targeted ads finding tax evasion with the top one percent of America and they have the data they need right now to do that and so throwing more data that they can't or won't use at them is not going to be helpful the experience one point four billion cyberattacks per year there have been. Numerous breaches that have been reported most recently at several of the top one percent tax returns were made public so that you know cybersecurity and data privacy huge concern second concern would be the unbanked and the underbanked this administration has made it very clear that that's a priority of those of theirs to get that population into the financial system but the number one concern for folks that aren't of putting their money in the bank is privacy they don't want the government having all their information and so this really pushes them if it may be the ones that are already in the system it may actually push them back out of the system and I think it would be a real deterrent for those that are considering coming into the system you know Arkansas our banks have really done a good job stepping up that the bank on plus accounts that the back on Arkansas plus. Have set up a for specifically for this population we actually have the most financial institutions involved in that program across the US so Arkansas banks have really made a lot of progress in this area and we would hate to see that go backwards and and the third is you know banking specifically banking related that it is going to take a lot of resources and a lot of money to implement this this is not something that they can just pull out of thin air and send to the IRS it takes a specific system because it's not just your bank account your checking or savings it's a loan accounts at your retirement accounts it's basically everything that money is going in and out of so they have to build a platform that will search across all of those different things to report this data in its new fields so they have to also expand the reporting for those field and you know eighty percent of most of our banks in Arkansas our small community banks and they rely on third party platform to do all these things for them and so they are at the mercy of that platform is as to how much it's going to cost and how long it's going to take and and so it just you know that it all piles up to just being detrimental basically that every American taxpayer. Thank you appreciate the. Representative of Wooten I believe. I have a motion and appropriate time Mister chairman okay I think we still have several questions Representive Richardson to the C. ran. Okay representative for a. Thank you Mr chairman thank you mistrusting for being here today is. Based on what you just described is it fair to say that this proposal if it were to go through would create significant compliance costs on our banks and financial institutions and is it fair to say that that would ultimately be a burden for consumers. That's you know that's typically how how it works is when there's increased cost and that does get passed on but in addition small business and everyday consumers are going to have to pay more to get their taxes done you know there'll be a lot more to reconcile for the accountants and so that that they're going to bear it on both sides basically. Okay thank you. Represent which Richardson again I saw your. Okay all right the person the flowers that you have a question. Yes Mr. Thank you I was just trying to make it does get clarity on exactly what this would do about a little bit about and I'm feverishly trying to find like what it does because I think a lot of articles saying what the implications would be and I really am interested in what with this new measure do if it were to pass Congress Sturch so if you have in it And inflow or outflow gross inflow or outflow within a year a twelve month period of six hundred dollars or more then there are additional data fields that will have to be reported to the IRS. AS which honestly that's twenty five dollars a month that captures basically every American. The following. Yes you're recognized so with whatever the standard is now what is the threshold now and as it relates to the dollar amount and then the fee at the data fields well because those data fields down exit I mean currently reporting that data doesn't exist so as far as a threshold goals there there there's really not one for this specific instance because they don't have to report that right now now some people are thinking about the ten thousand dollar threshold that's a one time ten thousand dollars so this will be different because it looks at an entire year so six hundred dollars for an entire year not just a six hundred dollar transaction so that is the difference between those two things and one more yes yes so so at any point in time in. They're giving year that an account. Reaches the value of six hundred dollars then that makes it a reportable account whether it's going in or coming out got it okay I thank you very much. Thank you very much representative Boyd. Thank you Mr chair. So you're so basically then what that might mean for me I mean I'm just been a little theoretical but if five remove six hundred dollars from the bank over a given period of time less than a year that the IRS might go we want to know what you do with that six hundred dollars and it's it could be incumbent on me to keep receipts or keep the catcher or something because now they they have that information and otherwise might make accusations correct they could decide the obvious. Okay thank you representative luncheon you're recognized. Thank you. So not only do we have a more expensive when our taxes are being done and have the kind Chris cost of banking increased cost of doing business. This this sounds like the government's actually digging in my couch cushions cushions for change instead of stopping spending or doing a better job of managing themselves and I understand this correctly we are a firm believer that instead of yes looking for further money based on six hundred dollars that if they would put resources into the IRS as far as a tech and people they could use the data they have and don't would need anything else. Follow up you're right you're recognized and six hundred dollars going in or six hundred dollars going out so every paycheck every dime. That's here well even relevant transactions now I'm gonna have to be justified yes that that like I said that equates to about twenty five dollars a month or twelve month span so all of that all of whatever date it is they they're going to require would have to be sent once you hit that six hundred dollars or so yeah. Sounds like legalize to rest my. Thank you okay thank you. Members any additional questions. Seeing none of representive hawk you are recognized to close for your resolution. Thank you Mr chairman thank you committee for hearing test today and taking this into consideration as it has been noted it is a extreme form of over reaches the I'm sorry let me interrupt you have a little out of practice here I'm supposed to call for anyone in the audience who may wish to speak for against the bill. And seeing none okay have you made thank you yes and so while this is preemptive we don't know that this is going to be implemented it is something that we would like to be on the record as a legislature that we oppose this kind of over reach for all the reasons that have been stated but in particular we want our financial institutions to partner with our communities and our consumers both the banked and unbanked as well and and they have been really good partners and this kind of scrutiny is not necessary nor has it ever been deem to be necessary up into this point so with that I would just ask for a good vote all right thank you very much and I believe at this point represented Britain did you have a motion. Yes Sir I did do pass okay we have a motion to do pass is there any discussion among members. If not all those in favor of the do pass motion signify by saying aye. Any opposed say no and there are none your resolution is passed congratulations. All the. Yes represent routing point of personal privilege again this is one of the yes or just a second I don't know whether you the committee members are aware of this. And I'm not sure how it's all flowing now in Washington with the agreement yesterday alone page one sixty eight. Of the reconciliation act which is a twenty five hundred page document a waste of money and time but nevertheless there's one sentence on page one sixty eight as soon as if a corporation or company does not mandate vaccination. they have an employee who is not vaccinated they will pay a seven hundred thousand dollar fine. It is that bill it's just it is gone from ridiculous demand just in the arctic if you will but only Jones at each of the committee members to be aware of that regardless of where you are on the vaccination or the mandates or anything for the federal government tell the company will fund the seven hundred thousand dollars they have a chemical fund last year were two people were killed six were injured they find them twelve thousand dollars thank you Mr chairman thank you members any other business before the committee. If not I will accept a motion to adjourn see a motion okay all those of favour of adjournment is signify by saying aye we are adjourned thank you for meeting with this.