STATE GOVERNMENT RELATIONS
Indiana General Assembly Now in 2022 Session
The Indiana General Assembly started the 2022 legislative session this week on Jan. 4. The 2022 session is considered a “short session,” with all legislative activity set to end on March 14. As a result, lawmakers have been quick to schedule committee hearings on a number of bills this week. Lawmakers have until the end of January to move any new legislation out of committee.
As the 2022 legislative session proceeds, the IBA Government Relations Team continues to represent industry views on banking-related legislation, including the following bills of importance. IBA members may track the progress of industry-related bills through IBA Insighter, an e-publication available during session. Email subscription requests to Maria Dowers.
House Bill 1001 - Administrative Authority; COVID-19 Immunizations
Author: Rep. Matt Lehman (R-Berne)
Bill Summary: The bill allows the secretary of family and social services (secretary) to issue a waiver of human services statutory provisions and administrative rules if the secretary determines that the waiver is necessary to claim certain enhanced federal matching funds available to the Medicaid program. Allows the secretary to issue an emergency declaration for purposes of participating in specified authorized federal Supplemental Nutrition Assistance Program (SNAP) emergency allotments. Requires the secretary to prepare and submit any waivers or emergency declarations to the budget committee. Allows the state health commissioner of the state department of health or the commissioner's designated public health authority to issue standing orders, prescriptions, or protocols to administer or dispense certain immunizations for individuals who are at least five years old (current law limits the age for the commissioner's issuance of standing orders, prescriptions, and protocols for individuals who are at least 11 years old). Defines “Indiana governmental entity” and specifies that an Indiana governmental entity (current law refers to a state or local unit) may not issue or require an immunization passport. Establishes certain requirements for the temporary licensure of retired or inactive emergency medical services personnel, retired or inactive health care professionals, out-of-state health care professionals, or recently graduated students who have applied for a physician assistant, nurse, respiratory care practitioner, or pharmacist license. Allows a health care provider or an officer, agent, or employee of a health care provider who has a temporary license to qualify for coverage under the Medical Malpractice Act. Provides that an individual is not disqualified from unemployment benefits if the individual has complied with the requirements for seeking an exemption from an employer’s COVID-19 immunization requirement and was discharged from employment for failing or refusing to receive an immunization against COVID-19. Provides that charges based on wage credits shall only be charged to the experience or reimbursable account of the employer who discharged the employee for failing or refusing to receive an immunization against COVID-19. Provides that an employer may not impose a requirement that employees receive an immunization against COVID-19 unless the employer provides individual exemptions that allow an employee to opt out of the requirement on the basis of medical reasons, religious reasons, an agreement to submit to testing for the presence of COVID-19, or immunity from COVID-19 acquired from a prior infection with COVID-19. Provides that an employer may not take an adverse employment action against an employee because the employee has requested or used an exemption from an employer’s COVID-19 immunization requirement.
Latest action: The bill was heard in the House Employment, Labor and Pensions Committee on Jan. 6. It was voted out of committee 7-4.
House Bill 1002 - Various Tax Matters
Author: Rep. Tim Brown (R-Crawfordsville)
Bill Summary: The bill repeals a provision that would require the budget agency to transfer the amount of combined excess reserves that exceed $2.5 billion in calendar year 2022 to the pre-1996 account of the Indiana state teachers’ retirement fund. Amends provisions that provide for an automatic taxpayer refund if sufficient excess reserves are available to: (1) clarify the tax return filing requirement for a refund; (2) require that refunds be distributed before May 1 of the calendar year immediately following the year in which a determination is made that the state has excess reserves; (3) remove provisions that require a taxpayer to have adjusted gross income tax liability in order to qualify for the refund; and (4) remove provisions that require the refund to be made in the form of a refundable tax credit. Provides that the minimum valuation limitation applicable to the total amount of a taxpayer’s assessable depreciable personal property in a taxing district is 30% of the adjusted cost of the depreciable personal property purchased before Jan. 2, 2022. Provides an exemption from the 30% minimum valuation limitation for new depreciable personal property purchased after Jan. 1, 2022. Requires the department of local government finance to develop or amend forms for property taxation of assessable depreciable personal property. Repeals the utility receipts and utility services use taxes. Provides a state income tax credit for property taxes paid on certain business personal property. Specifies a formula for determining the amount of the credit. Removes the double direct test currently applied in production sales tax exemptions. Phases down the individual adjusted gross income tax rate from 3.23% in 2022 to 3% in 2026 and thereafter.
Latest action: The bill was assigned to the House Ways and Means Committee.
House Bill 1034 - Tax Increment Financing
Author: Rep. Jerry Torr (R-Carmel)
Bill Summary: This bill reiterates that a lien resulting from an agreement between a commission and a taxpayer in an allocation area takes priority over any existing or subsequent mortgage, other lien, or other encumbrance on the property, and must have parity with a state property tax lien under IC 6-1.1-22-13.
Latest action: The bill was heard in the House Ways and Means Committee on Jan. 6.
Senate Bill 67 - Small Estates
Author: Sen. Tim Lanane (D-Anderson)
Bill Summary: The bill increases the value of estates that may be distributed via affidavit from $50,000 to $100,000. Increases the threshold for summary procedures for unsupervised estates from $50,000 to $100,000.
Latest action: The bill was heard in the Senate Judiciary Committee on Jan. 5.
FEDERAL GOVERNMENT RELATIONS
Action Alert: Urge Lawmakers to Oppose New IRS Reporting Rules
The Biden Administration is proposing a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Families Plan. While the initial draft of the Biden administration’s $3.5 trillion spending plan currently does not include the IRS reporting proposal, the language could be added over the coming weeks as the current package is debated. We must continue our grassroots efforts to ensure that this provision stays out of future drafts of the bill.
Contact your lawmakers today to express your opposition to any new IRS reporting that leads to increased compliance costs, damages your customer relationships and threatens customer privacy. In addition to the current action alert seeking bank employee participation, we have created an action alert with messaging specifically designed for bank customer engagement. Please consider sharing this unique action alert link so they may urge Congress protect their financial privacy!
Supreme Court Sets Jan. 7 Argument in Vaccine Mandate Dispute
The Supreme Court will hold oral arguments on Friday, Jan. 7, in the challenge to the employer vaccine mandate issued by the Occupational Safety and Health Administration. The mandate requires employers with 100 or more employees to ensure staff is vaccinated or tested weekly for COVID-19, among other requirements.
In December, a three-judge panel of the Sixth Circuit Court of Appeals lifted a judicial stay of the vaccine mandate. In response, OSHA stated that it will not issue citations for noncompliance with any aspect of the vaccine mandate before Jan. 10 and will not issue any citations for noncompliance with the mandate’s weekly testing requirements before Feb. 9 “so long as the employer is exercising reasonable, good faith efforts to come into compliance with the standard.”
In mid-December, business groups challenging the vaccine mandate filed an application with the Supreme Court for an emergency stay of the mandate. The Jan. 7 court date indicates that the Court is not likely to act on the stay requests until after that date.
McWilliams to Resign From FDIC
Federal Deposit Insurance Corp. Chairman Jelena McWilliams last Friday announced that she will resign from the agency on Feb. 4. Her resignation comes following a conflict among the FDIC’s directors over the powers of the agency’s chairman and board. Former FDIC chairman and current board member Martin Gruenberg is expected to become acting chairman.
“When I immigrated to this country 30 years ago, I did so with a firm belief in the American system of government,” McWilliams said in her resignation letter to President Biden. “It has been a tremendous honor to serve this nation, and I did not take a single day for granted. Throughout my public service, I have been constantly reminded how blessed we are to live in the United States of America.”
Late in 2021, following a purported notational vote, at least two other FDIC directors sought to release a request for information about the agency’s procedures for reviewing bank mergers. McWilliams and the FDIC’s general counsel argued that the agency’s chairman is in charge of the board’s agenda and the activities of the FDIC staff; in a Wall Street Journal op-ed last month, McWilliams described the effort as “a hostile takeover of the FDIC internal processes, staff and board agenda.”
CFPB Report Highlights Consumer Issues With Leading Credit Reporting Agencies
Consumer reporting complaints received by the Consumer Financial Protection Bureau increased significantly in 2021 over the prior year, with the bureau receiving more than 500,000 credit or consumer reporting complaints between January and September 2021, compared to the 319,000 it received in all of 2020, according to a report released Wednesday.
The vast majority of those complaints were related to the three major nationwide credit reporting agencies: Equifax, Experian, and TransUnion. The report also noted the volume of complaints about companies like banks that furnish information to consumer reporting agencies are similar to or exceed complaints about credit cards and bank accounts. The report found that consumers submitted more claims stating that information in their consumer reports was inaccurate than they did for any other problem.
In an analysis of these complaints, the CFPB noted that several factors likely contributed to the increase, many of which were related to the pandemic, including CARES Act relief, changes in regulatory guidance, increased shopping for mortgage credit and refinance credit due to low interest rates, and increased consumer awareness of the salience of credit reports. The bureau also flagged several issues that consumers face when attempting to dispute information on their credit reports, noting that they are often unsuccessful in disputing information in a timely manner; frequently expend time and money attempting to correct reports; and often find themselves caught between furnishers and the major credit bureaus when attempting to resolve disputes.
The CFPB found that Equifax, Experian, and TransUnion reported offering relief in less than 2% of complaints received in 2021, down from 25% of complaints in 2019. It also reported that consumer reporting agencies do not take available steps to distinguish between complaints submitted by third parties (such as credit repair organizations) authorized by the consumer and those not authorized.
FHFA Announces Higher Fees for High Balance Loans, Second Home Loans
The Federal Housing Finance Agency announced Wednesday it will increase fees for certain Fannie Mae and Freddie Mac high-balance loans and second home loans starting on April 1. Fees for high-balance loans will increase between 0.25% and 0.75%, and second home loan fees will rise between 1.125% and 3.875%, with both types tiered by loan-to-value ratio, FHFA indicated.
The new fees will not be applicable to first-time homebuyers in high-cost areas with incomes at or below 100% of area median income. The increased fees will also not be applied to affordable housing programs such as HomeReady, Home Possible, HFA Preferred and HFA Advantage.
The new fees are part of FHFA's previously announced updated 2022 performance goals for Fannie and Freddie and are expected to improve their regulatory capital positions over time, FHFA indicated.
FDIC Names Two Agency Veterans to Senior Roles
The Federal Deposit Insurance Corp. has announced the selection of two agency veterans to serve in senior leadership roles. Nikita Pearson will serve as deputy to the chairman for external affairs, and Dan Bendler will lead the FDIC’s Division of Administration.
CFPB Updates HMDA, TILA Asset Thresholds
The Consumer Financial Protection Bureau issued two annual threshold adjustment final rules under the Home Mortgage Disclosure Act and Truth in Lending Act, effective Jan. 1, 2022.
- HMDA (Regulation C): The asset threshold at which banks are exempt from collecting data increased to $50 million in 2022 from $48 million. Read more.
- TILA (Regulation Z): Creditors with assets of less than $2.336 billion as of Dec. 31, 2021, are exempt from establishing escrow accounts for higher-priced mortgage loans in 2022, if other Reg Z requirements also are met. Read more.