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Thursday, February 27, 2014

Financial Services Groups Oppose Proposed Bank Tax

ABA and other financial services trade groups have united to oppose a provision in the tax reform package proposed by House Ways and Means Committee Chairman Dave Camp (R-Mich.) that would phase out the deductibility of FDIC insurance premiums for banks with more than $10 billion in assets. Assessments would be completely non-deductible for institutions with more than $50 billion in assets. ABA’s chief economist, Jim Chessen, spoke on the issue:

“ABA opposes using the FDIC insurance fund as a mechanism to raise revenues. Premiums paid to the FDIC are a legitimate business expense, no different than any other insurance premium or other expenses such as salaries and benefits. The fund — which is a dedicated insurance fund protecting hundreds of millions of depositors — should never be used for political purposes.”

Camp’s proposal also includes other bank-related provisions, in particular a new 0.035 percent excise tax on all assets of Federal Reserve-designated systemically significant financial institutions with assets over $500 billion.

Read more about Camp’s proposal.
Read a section-by-section summary.
Read the trade group letter.

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