FOR IMMEDIATE RELEASE
ICBA Thanks Treasury for Moving Quickly on Tax Fairness
Washington, D.C. (Oct. 30, 2008)—The Independent Community Bankers of America (ICBA) today thanked the Treasury Department for issuing additional guidance clarifying how community banks can ease the burden from losses following the federal conservatorship of Fannie Mae and Freddie Mac. Community banks with a variety of preferred share investments in the government-sponsored enterprises received greater clarity on how they can recognize losses as ordinary losses for tax purposes.
“ICBA sincerely appreciates the Treasury Department’s hard and timely work to ensure community banks that have suffered losses on Fannie Mae and Freddie Mac preferred stock investments will receive fair tax treatment,” said Camden R. Fine, ICBA president and CEO. “This ICBA-crafted tax fix, passed by Congress and now further detailed by Treasury, will help community banks continue serving Main Street America.”
Many financial institutions invested in Fannie and Freddie preferred stock indirectly through a variety of financial instruments. The Treasury guidance (Revenue Procedure 2008-64) provides details on how institutions can receive ordinary tax treatment on losses from stock recognized through partnerships, banks investment subsidiaries and other transactions. Authorized by the Emergency Economic Stabilization Act passed Oct. 3, the Treasury’s new guidance, which is effective immediately, helps financial institutions as they prepare third quarter 2008 financial reports.
For further details on the guidance, visit “Economic Recovery Central.”