Delaware Bankers Say Proposed Federal Rule Could Endanger Citizen Privacy

Posted on 09-18-2021

The Delaware Bankers Association maintains that citizens’ privacy could be compromised by a proposed federal rule change and it is urging Delaware’s Congressional delegation to oppose it.
Association President & CEO Sarah Long made the plea in a recent letter sent to U.S. Senators Tom Carper & Chris Coons and U.S. Representative Lisa Blunt Rochester.
“The Delaware Bankers Association is strongly opposed to a proposal under consideration…that would create new tax information reporting requirements for financial institutions,” Ms. Long said in the September 9th letter.
Intended to identify people attempting to avoid federal taxes, the proposal would require financial institutions and other providers of financial services to track and submit to the IRS information on the inflows and outflows of every account exceeding an annual $600 threshold.
“This proposal would create a dragnet, collecting the financial information of nearly every American and requiring significant resources to build, police, and maintain,” the letter stated. “Policymakers must consider how account-holder data would be protected and whether a program of this scale and scope infringes on the American people’s reasonable expectation of privacy. The IRS experiences 1.4 billion cyber attacks annually, has had multiple data breaches, and continues to deal with the fallout of identity theft and false tax returns. Adding an entirely new set of data will likely expose even more taxpayer data.”
Additionally, the association maintains the rule change could intimidate some Americans, causing them to avoid the banking system altogether. “Privacy concerns are already cited as one of the top reasons that individuals choose not to open bank accounts,” Ms. Long wrote. “A reporting regime of this magnitude would potentially undermine our banks’ efforts to reach populations that are suspicious of working with regulated financial institutions.”