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Our 2012 Bipartisan Agenda

In this hyper-contentious presidential and congressional election year, all legislation will face a much higher hurdle to advance into law. Much of this year’s debates on Capitol Hill will be political theater designed to sway voters in November’s elections. Nevertheless, Congress faces several must-pass bills, and ICBA can make considerable headway on several important bipartisan legislative priorities for community banks.

Community bankers should closely follow ICBA’s lead this year on these five legislative priority issues. A strong grassroots outreach will be critical to advance these and other issues this session, but we can do it.

The Communities First Act. This signature ICBA tax and regulatory relief legislation continues to gather bipartisan momentum in the House and Senate. ICBA will remain on the offensive with lawmakers to scale back onerous tax and regulatory burdens wherever possible. The House Financial Services Committee is planning a mark-up session for the Communities First Act soon.

This legislative package will allow community banks to devote more of their resources toward economic recovery on Main Street. That’s something Republicans and Democrats want to achieve.

Tax reform. In addition to advancing constructive tax-relief provisions in the Communities First Act, Congress will be pressed to address other tax issues. ICBA will have to fight back proposals to impose new punitive tax levies specifically targeting the financial services sector. Deadlines this year also affect lower tax rates applied to individual income and Subchapter S corporations that should be extended or made permanent.

The large and growing federal debt and deficits, combined with $1.2 trillion in expiring tax cuts in 2012, will ensure tax issues debates continue into the general election. Fortunately, Congress and the administration actively seek ICBA’s advice on pro-growth tax initiatives.

Credit unions. ICBA will continue opposing the credit union lobby’s all-out efforts to pass unwise legislation to considerably expand the commercial lending authority of tax-exempt credit unions. Meanwhile, federal budget deficits are forcing more lawmakers to concede ICBA’s position that the federal exemption for credit unions, particularly for large bank-like credit unions, is no longer justified.

ICBA will press that, if credit unions want expanded business powers, they must pay taxes. By keeping up our advocacy pressure, a breakthrough is possible this year or next.

Housing finance reform. Congress will continue to debate and refine its policy options for housing finance reform, and ICBA will be busy continuing to explain why our nation’s housing finance system must preserve the role of community banks in mortgage lending. Among the many critical issues at stake in this debate are ensuring a strong, impartial secondary market and preserving the Federal Home Loan Bank system.

As policymakers seek to remove Fannie Mae and Freddie Mac from conservatorship and reshape the secondary market, ICBA will continue to fight for community banks’ important role and fair access to the mortgage finance marketplace.

FDIC "TAG" extension. The unlimited FDIC insurance coverage for noninterest-bearing Transaction Account Guarantee program expires this Dec. 31. ICBA will be working overtime to extend the TAG coverage. We will continue to point out to lawmakers from both political parties how extending TAG is needed to help mitigate ongoing funding advantages too-big-to-fail institutions have over community banks.

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