May 8, 2013
The Honorable Rand Paul
208 Russell Senate Office Building
Washington, D.C. 20001
Dear Senator Paul,
On behalf of the Credit Union National Association (CUNA), I am writing to express support for S. 887, which would repeal the Foreign Account Tax Compliance Act (FATCA) so that regulatory relief will be provided to U.S. credit unions and other financial institutions. CUNA is the largest credit union advocacy association in the United States, representing nearly 90 percent of America’s 7,000 state and federally chartered credit unions and their 96 million members.
We share your concern that FATCA, if left in place, will impose billions of dollars of compliance costs on U.S. credit unions and banks annually. We are also concerned that FATCA and FATCA-related intergovernmental agreements with foreign nations undermine the constitutional privacy rights of U.S. credit union members and bank customers.
The FATCA statute passed by Congress in 2010 made no references to U.S. credit unions and banks yet U.S. financial institutions will be required to bear a large proportion of FATCA’s compliance burdens. U.S. credit unions and banks will be required to comply both with the ‘withholding agent’ provisions of the Internal Revenue Service’s FATCA regulations and the IRS’s FATCA-related non-resident alien Form 1099-INT reporting rules promulgated by Rev. Proc. 2012-24 in April 2012. In addition, the Administration has requested in its FY 2014 Budget authority to impose additional non-resident alien reporting requirements on U.S. credit unions and banks to help facilitate FATCA intergovernmental agreement negotiations.
CUNA is also concerned that the European Union is considering adopting a ‘European FATCA’ which would regulate U.S. credit unions and banks in the same manner that the United States’ FATCA purports to regulate credit unions and banks in the European Union. Unless Congress repeals FATCA, we think that it is only a matter of time before the extraterritorial diktats of a European FATCA and other FATCA-inspired foreign laws become additional compliance burdens on U.S. financial institutions.
On behalf of America’s credit unions and their 96 million members, we appreciate your leadership on this issue, and look forward to working with you on this matter.
Best regards,
Bill Cheney
President & CEO
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