While the FHLBanks and our members continue to track GSE reform measures and other regulatory relief efforts moving forward, there is perhaps no topic that will have a greater impact on our membership as quickly as the comprehensive tax reform packages emerging in Congress.
Above all, the financial services industry will undoubtedly benefit should corporate rates be lowered to 20%. However, our members also anticipate the path to reform within the confines of the budget resolution means the “pay-fors” in any scenario will dictate how the industry ultimately views a reform package.
Among the various provisions included in early versions of 2017 reform or other packages in previous years, these are a few we’ll be taking particular interest in observing:
- FDIC premium deduction phase-outs or eliminations
- Treatment for S Corporations
- New taxes on financial transactions as cited in a 2016 CBO report that would have imposed a tax on the purchase of most securities and on transactions involving derivatives.
- New taxes on liabilities of banks and non-bank SIFIs over certain thresholds.
As a cooperative, FHLBanks share our members’ prosperity in a very tangible way. We always strive to serve as a conduit to Congress for a wide swath of the financial services industry. With change on the horizon, we will remain engaged with our membership to bolster their advocacy efforts, but we also hope you will continue to consider us a resource in helping to facilitate this process and share your news with our members.