ICBA continues to promote tax and budget policies that foster economic growth and support the community bank sector by providing direct tax relief and encouraging private savings and small business investment. A fair and unbiased tax code will enhance the viability of community banks and the vital role they serve in the U.S. economy as a source of lending for consumers, small businesses, and farms.
Tax relief created by the 2017 Tax Cuts and Jobs Act has supported community lending and investment in workforce, technology, and physical infrastructure. Repeal of these changes or the imposition of new taxes, such as were considered in Congress in 2021, would be devastating to the continued independence of American small businesses. Higher taxes on community bank operating income or higher estate taxes, coupled with a recent surge in regulatory burden, would accelerate the current trend toward consolidation in the banking sector.
ICBA supports carefully designed tax incentives for community bank lending to low-to-middle income individuals, small businesses, and small farms. These incentives would lower credit costs for targeted borrowers and help community banks diversify their loan portfolios and comply with the Community Reinvestment Act.
Tax incentives for community bank retained earnings would strengthen capital and promote lending. Such tax relief would also narrow the tax gap between community banks and tax-exempt credit unions and Farm Credit System (FCS) lenders, many of which are multi-billion-dollar entities. These institutions have evolved into the equivalent of banks and should be taxed equivalently.
Direct grassroots advocacy is essential to promoting federal policies that support community banking – and ultimately impact your role at the bank. Our Be Heard grassroots action center offers a variety of tools to help you amplify your voice with targeted outreach to federal policymakers.
Just like everything else, lobbying is a skill. This toolkit makes it easy to learn the best way to communicate with and engage policymakers in this virtual environment. No matter what role you have at the bank, YOU can support community banks and make an impact.
Every year, community bankers are invited to attend the complementary ICBA Capital Summit and this year is easier than ever to participate. The event is fully virtual, April 27 at 11am-1pm Eastern Time, so mark your calendars!