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 Home > Advocacy
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ICBA Policy Resolutions for 2009
ICBA Priorities for 2009
ECONOMIC RECOVERY
Position
- Economic recovery proposals should involve community banks to the maximum extent feasible.
- The government should direct efforts to assist groups that have been hard hit by the economic downturn, including homeowners, homebuyers, renters, workers, and taxpayers.
- The government should also direct assistance to small businesses and municipalities which are in a good position to create new jobs and rebuild the nation's infrastructure.
Background
The nation is facing the worst economic climate in decades. Community banks, small businesses, and municipalities did not cause the fundamental problems we face. However, they are well positioned to help lead the economic recovery.
The immediate cause of the economic downturn is the crisis in the housing market. Therefore, the Administration and Congress should take steps to put a floor under home values and provide incentives to community banks, small businesses, and local governments to take steps that will create new jobs.
ICBA has made a number of recommendations aimed at bolstering the housing market and creating new jobs. We urge Congress to adopt and implement them in this year. These proposals include:
Helping Taxpayers and Workers
- Immediate AMT Relief. Provide immediate individual AMT relief for tax years 2009 and 2010. Will provide tax certainty and prevent additional taxpayers from being swept into punitive AMT and increase their after-tax incomes.
- Extend Work Opportunity Tax Credit. Enhance and extend the employers’ WOTC through 2010 to create jobs by encouraging greater hiring of new workers.
Helping Homeowners, Homebuyers, and Renters
- Enhance First-Time Homebuyer Tax Credit. Extend the existing $7,500 federal tax credit for first-time home purchase through 2010 and remove repayment provision.
- Unleash FHA Potential. Increase capacity for Federal Housing Administration to serve homebuyers and homeowners. Increasing capacity at FHA and Ginnie Mae will allow the agency to carry out its mission and assist homebuyers and communities.
- Increase Resources for Rural Housing Guarantees. Increase the Rural Housing Service Section 502 Guarantee Program. Section 502 loans are primarily used to help low-income homebuyers purchase homes in rural areas.
- Stimulate Construction of Affordable Rental Housing. Reduce interest rate for loans backed by multifamily properties assisted with low income housing tax credits.
Helping Small Businesses
- Expedite SBA Small Business Loans. Create a streamlined SBA 7(a) loan program with up to 95% government guarantee for small business loans up to $500,000 and reduced lender and borrower fees.
- Small Business Subchapter S Tax Relief. Increase the S corporation shareholder limit to 150 from 100 and allow IRA investments in Subchapter S banks.
- Expand Small Business Section 179 Immediate Expensing. Extend the $250,000 small businesses immediate expensing and raise to $1 million the purchase cap through 2009.
Helping Communities
- Immediate Increase in Muni-Bond Threshold. Update from $10 to $50 million the annual issuance limitation for qualified-tax-exempt-obligations. This will allow community banks to play a larger role in supporting school construction, infrastructure and other municipal projects.
- Community Bank Support of Local Government Projects. Provide permanent authority to Federal Home Loan Banks to guarantee community bank-issued letters of credit issued to enhance the credit rating of local government bonds. This allows community banks to serve traditionally underserved small issuers of tax-exempt bonds.
- Rural Economic Advancement Program (REAP) – Allow banks to exempt from taxation interest income from loans made in rural areas to finance loans to farmers, small businesses, and for economic development.
Helping Community Banks Serve Consumers and Businesses
- Community Bank TARP Access. Ensure interested community banks have access to the Troubled Asset Relief Program (TARP), to boost capital and increase lending as the legislation intended.
- Direct Accounting Relief. Congress should direct regulators to temporarily suspend the misapplication of mark-to-market and “Other Than Temporary Impairment” (OTTI) concepts to financial institutions during these extraordinary abnormal market circumstances.
- Expand Loss Carryback to Five Years. Expand the current Net Operation Loss Carryback (NOL) period to five years from two years. This will help free up small business resources now to help weather the economic downturn and to support investment and employment in their communities at a time when capital is needed most.
Staff contacts: Steve Verdier and Paul Merski
Return to ICBA Priorities for 2009
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