Latest News Tagged With “2015”

New Ways & Means Speaker Named

Nov 07, 2015

On Wednesday, the Republican Steering Committee tapped Representative Kevin Brady (R-TX) to succeed Speaker Ryan as the committee's chairman. Both he and his challenger, Representative Pat Tiberi (R-OH), are strong allies of S corporations and pass-through businesses. Representative Brady takes over from former Chairman Paul Ryan, the new House speaker. Brady, who was first elected to Congress in 1996, will become the seventh Texas Republican to chair a House committee. Several members of the Steering Committee said that while Tiberi is well liked, Brady’s experience was a deciding factor for the gavel.  This was Brady’s second run at the chairmanship, after being passed over for the gavel by Ryan at the beginning of this Congress. The Wall Street Journal had an interview with the new Chairman, where Brady makes clear he wants tohave a robust tax extender package (yea!) this fall than then spend next year pushing the "step one, step two" plan for tax reform outlined by Paul Ryan in the past year: Q: What's the first thing you're going to try to get accomplished this year? A: We're going to continue to tee up pro-growth tax reform. There's two steps we can take that are real, one of them immediate, which is to negotiate a package of permanent provisions among those [expired tax breaks]. One, because it creates certainty for the economy. Two, you get a better bang for the buck for the tax provisions. And three, it's honest scorekeeping. It identifies what truly are permanent parts of the code. I will pick that up and see if we can't conclude a package that works for both parties.  Read more

Hensarling Request GAO Study Reducing Dividends

Sep 12, 2015

With a provision in the Highway Trust Fund reauthorization bill that would reduce the dividends paid on Federal Reserve Bank stock to Federal member banks still being floated as a revenue-raising measure on Capitol Hill, House Financial Services Committee Chairman Jeb Hensarling (R-TX) has asked the Government Accountability Office (GAO) to study the implications of reducing the annual dividend rate that the Federal Reserve pays to member banks. “Hensarling asked GAO to study the historical rationale for the arrangement, the historic rates of return on other government securities, the budget and policy ramifications of reducing the annual dividend or changing it to a floating reference rate and the impact of making the system voluntary instead of mandatory.” “I ask that the GAO engage with all relevant public and private sectors stakeholders, including, but not limited to, relevant federal and state regulatory authorities and affected banking organizations of all sizes.” Hensarling wrote in a Sept. 10 letter to Comptroller General Gene Dodaro. Hensarling-Letter-Fed-Dividend    Read more

Regulatory Relief Roundup

Sep 09, 2015

On September 8, four trade associations representing 14,000 financial institutions – the American Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federal Credit Unions – submitted a letter to Senate Banking Committee Chairman Richard Shelby and Ranking Member Sherrod Brown urging them to enact bipartisan legislation that would provide “regulatory relief to community financial institutions.” The letter describes the measures that community banks have been forced to make to address the “growing volume and complexity of regulations,” including cutting back on their loan officers ranks in favor of additional compliance staff and adjusting or eliminating financial products and services offered to consumers. The letter urges the Senate to pass the Financial Regulatory Improvement Act of 2015, S. 1484, which was approved by the Senate Banking Committee in May. This legislation, the letter claims, will “addresses statutory and regulatory obstacles that thwart the ability of community banks and credit unions to fully serve the diverse financial services needs of consumers.”  Read the letter  Read more

Community Bank Flexibility Act

Jul 28, 2015

Congressman Kenny Marchant (R-TX-24) has introduced the Community Bank Flexibility Act. H.R. 3287, The Community Bank Flexibility Act, was introduced on July 29th and to date has two cosponsors: Congressman Lamar Smith (R-TX-21) and Congressman Diane Black (R-TN-6).   Read more

State Update: Minnesota Legislation

Jun 29, 2015

The Independent Community Bankers of Minnesota introduced legislation in 2014 at the state level which would allow pass-through businesses to re-invest business earnings tax free. If business earning were sent out as dividends, no tax break would occur. ICBM viewed this as an economic development plan allowing s-corp and their pass-through businesses to expand more quickly. For s-corp banks in particular, it would help s-corp banks three ways: to raise capital levels; to conform to new higher capital requirements, while increasing their  lending capacity. In 2013, Democrats controlled both houses of the Minnesota Legislature as well as the Governor’s office.  The Governor, House and Senate passed  legislation creating a new upper tax tier of 9.75%. This amounts to a two percent increase, raising the top state tax rate from 7.75%.  Tax increase advocates, backing  Governor Mark Dayton’s proposal, echoed his message that the tax increase was necessary so Minnesota’s richest individuals, the top 2%, “pay their fair share.” ICBM’s proposal gathered support in the 2015 Session from many business groups and legislators. Among businesses supporters was the MN Chamber of Commerce. During the 2015 session ICBM’s proposal evolved as more groups and legislators became interested. The proposal going the farthest was HF 63 and SF 102. These bills proposed setting a maximum tax rate on active business income at 7.85% for all pass-through entities – s-corporations, partnerships, and sole proprietors.  The cost of the proposal was very high making it unrealistic to pass.  In response, State Senator Terri Bonoff, DFL-Minnetonka, amended her version (SF 102) so it only applied to s-corporations, stating she hopes it could be expanded to other pass-through businesses in the future. Minnesota’s 2015 Legislature had a $1,9 billion surplus. When the session ended they left nearly a billion dollars on the bottom line. Should the 2017-18 budget forecast show additional budget surpluses, competition for funding will be even greater than in the past session, but ICBM will continue to push for tax reform assisting s—corporations and other pass-through entities. Community banks  need this and our pass-through business customers need it too. Proponents of the tax increase argued Minnesota’s richest don’t pay their fair share. They are well organized and their message is simple and easy to understand. Unfortunately, the consequence of this proposal is that it not only hit the richest two percent, but a number of Minnesota’s businesses. 2. Federal corporate tax cuts were a subject of interest in the spring of 2015 but did not go anywhere. If corporate rats are cut however, doing so without reducing tax rates on pass-through businesses could result in pass-throughs (Individuals) paying higher tax rates than the largest corporations (see below from the Kippling Report. From the Kippling Report: May 2015 " It’s still a long shot, but chances of corporate-only tax reform are growing amid talk about a special tax rate on the business income of individuals. If the change is made, the top tax rate on business income of S corporations, partnerships, sole proprietorships, etc., will equal the new corporate rate…probably 28%. Now income from such companies is taxed at individual tax rates, so corporate reform without any change in taxing business income of individuals would leave many owners of unincorporated firms paying more than corporations. Some significant roadblocks remain in place, however: To offset the cuts, businesses would lose some much-loved deductions, all of which have lobbies that will fight hard for Congress to preserve them. Plus...President Obama favors higher taxes on multinationals than the GOP does. And with elections ahead, lawmakers aren’t keen on alienating supporters." A special thanks to the Independent Community Bankers of Minnesota Government Relations Team for an update on this important piece of legislation.  Read more

ICBA Advocates Bill Helping S-Corps Raise Capital

Jun 26, 2015

ICBA expressed support for legislation introduced by Rep. Kenny Marchant (R-Texas) that would help Subchapter S banks raise capital. The Capital Access for Small Business Banks Act (H.R. 2789) includes provisions to raise the S-corp shareholder limit from 100 to 500, allow S-corp banks to issue preferred stock without a cap, and allow preferred stock dividends to be deductible by S-corp banks and ordinary income for holders to preserve sound tax treatment. ICBA is a strong supporter of legislation to promote tax relief and equitable treatment for Subchapter S banks.  Read the letter  Read more

S Corp Modernization Act

Jun 17, 2015

Representative Dave Reichert (R-WA) and Representative Ron Kind (D-WI) have introduced the S Corporation Modernization Act of 2015 (HR 2788). The legislation is designed to:    • Modernize the rules that apply to firms that have selected S corporation status; • Increasing the ability of S corporations to access much-needed capital; and • Ease and expand S corporations' ability to make charitable donations. In a joint press release, Rep. Reichert described his legislation in these terms: "This is a common-sense bill, and I am proud to introduce it with my colleague Mr. Kind. We must continue to support our small businesses and allow these proven job creators to access the capital they need to grow, compete, and get Americans back to work." Rep. Kind made the following comment: "Under this legislation, S corporations will be better able to access credit, invest in their business, and create the good paying jobs that we need."    Read more

Registration Open for 18th Annual Conference

Jun 01, 2015

In the past five years new rules, guidelines and responsibilities have changed the way we all do business. The pace of change is accelerating, and on top of that, some of the recently-enacted requirements are already being changed! We all scramble to stay up to date on the latest tatics, legislation, and tools to set up a game plan and educate ourselves, but it's an exhausting process.  You need help. That's where the Subchapter S Bank Association conference comes in. We've dissected every bit of information relating to Subchapter S banks and their opportunities and challenges, and organized it, and will present it to you in a way that will ensure you are up-to-date and armed with tips, action steps, and the knowledge necessary to improve performance. We are bringing together a group of industry experts and a large group of industry participants to sort through the news of the year. You can be certain that you will be up-to-date and ready to tackle those thorny obstacles you are facing. When: October 28-29, 2015 Where: St. Anthony Hotel, San Antonio, Texas REGISTER NOW To view the Agenda click on our "Events" Tab.  Read more

Strategic Capital Management Web Seminar

May 22, 2015

One of the top concerns for community banks today is access to capital. In order to thrive under New Basel III capital rules and regulatory pressures banks need capital to introduce new products and expand market share. Join us as we discuss factors driving M&A, three primary uses for a capital raise, and the opportunity to enhance shareholder value. Please join to us for a Strategic Capital Management Web Seminar on June 5, 2015 at 11:30 am CDT at: *After registering you will receive a confirmation email containing information about joining the web seminar.  Read more

Mississippi & Louisiana Regional Meeting

May 13, 2015

Join the Subchapter S Bank Association in Natchez, Mississippi on May 27th for a regional meeting. When Wednesday, May 27, 2015 12:30PM - 3:30PM Where Hotel Vue 130 John R Junkin Drive Natchez, Mississippi 39120 Patrick Kennedy, Jr., of the law firm of Kennedy Sutherland, LLP and founder of the Subchapter S Bank Association, will provide a current update on legislative and regulatory matters affecting Subchapter S banks, including the Capital Access Initiative currently underway. Bennett M. Jeansonne, of Silas Simmons LLP, will provide a review and update on relevant tax and accounting developments. In addition, William D. Sutherland will discuss challenges & opportunities in managing Sub S shareholders, Board and Bank, including specific thoughts on succession planning. Join us for lunch and fellowship and to learn more about the activities of the Sub S Bank Association, meet other Sub S bankers from the region in an informal setting, and to ask questions and discuss specific Sub S issues. Lunch will be served. Please RSVP to Amy Trevino at or 210-551-0094.  Read more

ESOP Bill Introduced in Congress

May 04, 2015

U.S. Representatives Dave Reichert (R-Washington) and Ron Kind (D-Wisconsin) introduced a bill to encourage the creation of S Corporation Employee Stock Ownership Plans (S ESOPs). The Promotion and Expansion of Private Employee Ownership Act of 2015 (H.R. 2096) includes provisions to encourage owners of S Corporations to sell their stock to an ESOP, expand financing opportunities for S Corporation ESOPs, provide technical assistance for companies that may be interested in forming an S Corporation ESOP, and ensure that small businesses that become ESOPs retain their Small Business Association certification.  Read more

Jill Castilla Joins Subchapter S Bank Association Advisory Board

Apr 21, 2015

Citizens Bank of Edmond’s President Joins Subchapter S Bank Association Advisory Board The Subchapter S Bank Association is excited to announce the appointment of Jill Castilla as an advisory board member, effective immediately. Mrs. Castilla’s appointment expands the board to eight members. Other board members include Randy Rouse (Broadway Bank, San Antonio, TX), Guy Colado (Commerce National Bank & Trust, Winter Park, FL), Peter Haddeland (First National Bank in Mahnomen, Mahnomen, MN), John Madden (First National Bank LaGrange, La Grange, IL), Alfred Jones (American Bank, N.A., Corpus Christi, TX), Patrick J. Kennedy, Jr. (Kennedy Sutherland LLP) and William D. Sutherland, VI (Kennedy Sutherland LLP). “Jill’s broad knowledge and experience on S corp issues and community banking will add a valuable perspective to our advisory board,” said Patrick J. Kennedy, Jr., President of the Association.  “We appreciate her willingness to serve on the board and look forward to benefitting from her judgment and forward thinking regarding the banking industry.”  Read more

Illinois Subchapter S Bank Association Regional Meeting

Apr 16, 2015

Join the Subchapter S Bank Association and the Illinois Bankers Association on Tuesday, May 5th from 4:00 pm to 6:30 pm at the Hyatt Lodge on McDonald's Campus for a reception.  Read more

Regulatory Round Up April 2015

Apr 15, 2015

The U.S. House of Representatives this week passed five regulatory relief bills that help community banks.  Read more

Yellen Responds to Sub S Basel Fix

Apr 10, 2015

Federal Reserve Chairman, Janet Yellen, declined to pursue a policy change that would solve a tax liability problem for Subchapter S shareholders should the bank’s capital levels fall below the Basel III capital conservation buffer. Basel III’s capital conservation buffer prevents banks from making distributions to shareholders when capital falls below a threshold -- but because federal tax liability passes through a Sub S bank to individual shareholders, Sub S shareholders can face tax liability even when they have not received a distribution. This puts Sub S banks subject to the buffer at a disadvantage to C corporation banks, which pay any taxes due directly out of the bank’s income. The Subchapter S Bank Association has sent letters and advocated for a solution to this along with many other banking associations. Yellen said in a response to a letter from several House members urging a solution that the Fed “continues to believe that the capital conservation buffer should be applied equally to all banking organizations. Read Yellen's Response  Read more

Join Subchapter S Bank Association for a Regional Meeting at BHCA Spring Seminar 2015

Mar 24, 2015

Don't miss the 2015 Spring Seminar of the Bank Holding Company Association. The seminar will help you "Build on a Foundation of Success," giving you the information & networking opportunities you need to take your bank holding company to the next level. The seminar is bigger & better than ever with an expanded Monday session, more breakout sessions, & outstanding speakers. This year join us for a new special two-part session that will look at the current issues affecting sub S banks and holding companies, and investment strategies designed to make the most of your sub S election. Be sure to bring your directors or bank colleagues with you to this session. Then, enjoy our traditional reception and dinner. Click here for more information    Read more

House Passes Tax Extenders in 2015

Feb 20, 2015

On February 13, 2015, the House voted 272 to 142 to adopt the built-in gains tax relief and the charitable contribution basis adjustment for S corporations as part of H.R. 636, the America's Small Business Tax Relief Act of 2015.   These provisions were originally sponsored by Representatives Dave Reichert (R-WA) and Ron Kind (D-WI) in bills making permanent the five year built-in gains holding period (H.R. 629) and a basis adjustment to ensure S corporations are able to deduct the full value of the stock they donate to charity (H.R. 630).  After being adopted by the Committee on Ways and Means, the reforms were combined with a provision to permanently increase the Section 179 expensing limitation as part of H.R. 636. These important reforms received strong bipartisan support.  All but one Republican voted for the measure, while 33 Democrats parted with their leadership and the Administration and voted yes. No date has been set by the Senate to take up the measure.  Read more

Tax Extenders Move Through Ways & Means Committee

Feb 10, 2015

On February 4, 2015, the House Ways and Means Committee, now under the Chairmanship of Congressman Ryan, approved seven bills to permanently renew certain provisions that traditionally have been part of the larger tax extenders package. Included in the passage were two bills that were introduced by Representatives Dave Reichert (R-WA) and Ron Kind (D-WI). H.R. 629 and H.R. 630 extend tax provisions critical to S Corp banks and build off momentum from last Congress when identical bills successfully passed the House with broad bipartisan support. HR 629, would make permanent the reduced recognition period for built-in gains of S corps. HR 630 would make permanent certain rules regarding basis adjustments of stock of S corps making charitable contributions of property. Commenting on introduction of the legislation, Representative Reichert noted that "S Corporations are proven job creators and it is our job as legislators to make sure the tax code helps them to access the capital they need to grow, remain competitive and help get Americans back to work. I am pleased to introduce these bipartisan pieces of legislation with my colleague Congressman Kind, because our tax code should encourage growth rather than stifle it. I look forward to working with my colleagues to advance policies that help our small businesses create jobs and support families across the country." Representative Kind added that "These commonsense, bipartisan bills will bring stability and simplicity to the tax code to make it easier for many small businesses to create good jobs and help sustain local communities." Other tax bills that the Ways and Means members signed off on were: H.R. 636, America's Small Business Tax Relief Act of 2015 H.R. 637, Permanent IRA Charitable Contribution Act of 2015, H.R. 640, Private Foundation Excise Tax Simplification Act of 2015 H.R. 641, Conservation Easement Incentive Act of 2015 H.R. 644, Fighting Hunger Incentive Act of 2015  Read more

Congressman Hatch Works to Reform Tax Code

Jan 22, 2015

Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., today announced the co-chairs of the five working groups they created to advance tax-reform efforts in the 114th Congress. The groups will work with the Joint Committee on Taxation (JCT) to review current tax law, analyze available reform options and produce a comprehensive report that can serve as a foundation for bipartisan tax reform legislation. The report is expected to be released by the end of May. The five working groups are community development and infrastructure, co-chaired by Sens. Dean Heller, R-Nev., and Michael Bennet, D-Colo.; business income tax, co-chaired by Sens. John Thune, R-S.D., Ben Cardin, D-Md.; individual income tax, co-chaired by Sens. Chuck Grassley, R-Iowa, Mike Enzi, R-Wyo., and Debbie Stabenow, D-Mich.; international tax, co-chaired by Rob Portman, R-Ohio, and Chuck Schumer, D-N.Y.; and savings and investment, co-chaired by Sens. Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio. In a speech on the Senate floor Congressman Hatch outlined seven principles needed to guide comprehensive tax reform forward, saying such reform should embrace economic growth, fairness, simplicity, permanence, competitiveness, promoting savings and investments, and revenue neutrality. “In the coming weeks and months, I plan to reveal additional steps.  I plan to involve many of my colleagues on both sides of the aisle, particularly those who will be joining me on the Senate Finance Committee.  My hope is that, as this conversation continues, a path toward real bipartisan tax reform will begin to take shape.  Of course, it’ll take more than just a talk and discussion.  It’ll take hard work, commitment, and, of course, compromise." Read More of Congressman Hatch's Seven Principles for Comprehensive Tax Reform  Read more

Mobile Banking Web Seminar

Jan 20, 2015

Register Now for our "From Apps to Apple Pay | Leveling the Mobile Playing Field Web Seminar  Read more

Ways & Means Committee Off to a Good Start

Jan 16, 2015

New Chairman of the House Committee on Ways and Means Paul Ryan (R-WI) held the first hearing of the 114th Congress  on January 13, 2015. The hearing's focus was on the state of the U.S. economy and policies that can promote job creation and economic growth. During the hearing key members kept raising the question of how to best treat pass-through businesses in tax reform: Dave Reichert (R-WA) (1:53:00):" In another area where we have the ability to boost our economy - through tax reform, as has been mentioned, and which would benefit businesses large and small -- what about pass-through businesses...which face a high marginal tax rate in addition to high compliance costs. How do you see the change in the tax code specifically helping those small pass-through businesses?" Economist Martin Feldstein who was an invited witness commented: "I think that's a major challenge that you face as a committee and in Congress in dealing with tax reform. That lowering the corporate tax rate, where both the President and Republicans have said 'we've got to get down into the twenties,' will still leave pass-through businesses, who file through their personal tax returns, facing much higher tax rates, so somehow that has to be dealt with. And by treating the business income of individuals differently from other things, so that in effect they get the advantages of the lower tax rate that come with corporate tax reform." Rep. Vern Buchanan (R-FL) (2:22:00): "I want to bring up something my colleagues mentioned earlier, about corporate rates being the highest in the world...I think we agree that we need to do something with corporate rates. My concern is pass-through entities. You touched a little bit on effective rate, and how when you add everything the effective rate is 40 percent or more, and if you add in state income tax, the average is 49.6. So if you look to move corporate rates from 35 to 28 to 25, whatever they're thinking about doing there, I don't know how you can be competitive in terms of pass throughs. One statistic I got is 99 percent of the companies registered in Florida and other places are small businesses, obviously a lot of them pass throughs. And 60 percent of job creation comes from these businesses, and many of these start-ups. In terms of reducing the rate, if you're a pass-through company and you have seventy employees, and you're giving half your money back to the various governments, it's pretty hard to be able to grow your business, add equipment, add jobs, when you're giving half of [your money] away. My point, to the professors here today, is to ask what effect lowering the rates on C corps and pass throughs would have on the economy and on creating jobs...." Economist Doug Holtz-Eakin who was invited to provide testimony:  "It's bad tax policy to treat business income differently depending on whether it's a pass through or a C corporation. And that would drive you to organize your business based on tax considerations rather than business considerations; that's the hallmark of the tax system interfering with the economy." Representative Todd Young (R-IN) (3:00): " I'd like to talk about tax reform...but specifically focusing on tax reform for our smaller businesses and younger firms. I do have some concerns, going back to the small and younger firms that, about some intimation by the President and by others in this town that we may only consider corporate reform, rather than the individual code so that those pass-through entities like S corporations and LLCs get the benefit of simplification, on one hand, and rate reduction, knowing that many of them pay over half of their profits in taxes, when you combine the taxes at different levels of government. It bears reminding that, over the past decade, more than six out of every ten new jobs created in this country have been through these smaller firms, and this is where over half of jobs currently exist in this country."  Read more

OCC Releases Paper on Community Bank Collaboration

Jan 13, 2015

Today, the Office of the Comptroller of the Currency’s (OCC) released a paper entitled " An Opportunity for Community Banks:Working Together Collaboratively." In the paper the OCC's express it's views for collaborative efforts by community banks to pool or share resources to reduce costs and leverage specialized expertise. In the paper the OCC discusses ways for community banks to work together with their peers to lower expenses, obtain compliance, and compare products and services. The OCC believes, "as diverse as community banks are, they share the same commitment to supporting the communities they serve. With this in mind, the OCC sees an opportunity for community banks to share resources and expertise to the mutual benefit of all involved."  Read more

Association’s Board of Director Tapped to Dallas Fed Board

Jan 08, 2015

The Federal Reserve Bank of Dallas has appointed American Bank CEO & and chairman Alfred B. Jones to its San Antonio Branch board of directors. Mr. Jones will serve the remiainer of the term and will be eligible for a three year reappointment at the end of December. As a board member, Jones will provide input on regional economic conditions as part of the Federal Reserve's monetary policy functions. Jones previously served on a pilot Bank Advisory Council at the Dallas Fed's San Antonio Branch in 2008. He remained a member until 2014. He also is a commissioner on the Port of Corpus Christi Authority, is chairman of the Corpus Christi Regional Economic Development Council, and a board of director for the Subchapter S Bank Association and a past chair of the Independent Bankers Association of Texas.  Read more

Community Banker Allan Landon Tapped to Fed board

Jan 07, 2015

On January 6, 2014, President Obama nominated former community banker, Allan Landon, to a seat on the U.S. Federal Reserve's board. Landon, a partner at private investment fund Community BanCapital, was chief executive of the Bank of Hawaii from 2004 until 2010. Previously, he had worked as the bank's chief financial officer and as CFO at First American in Tennessee. After months of pressure by the community banking industry, which is regulated by the Fed and which has argued that the Fed’s seven-member board should include at least one person with relevant experience of the community banking sector. Mr. Landon would become the first Fed governor with community banking experience since Elizabeth A. Duke left the board in 2013. Landon was nominated to fill the remaining term of Sarah Bloom Raskin, who stepped down in March after being picked by Obama to become deputy Treasury secretary. The White House indicated Landon would be nominated to fill the final year of Raskin's term, which ends Jan. 31, 2016, and a full 14-year term after that. “Allan Landon has the proven experience, judgment and deep knowledge of the financial system to serve at the Federal Reserve during this important time for our economy. He brings decades of leadership and expertise from various roles, particularly as a community banker.  I’m confident that he will serve our country well.”” President Obama said.  Read more