Be Heard: Sub S Action Items for 114th Congress
Take action and let your voice be heard.
- The Capital Access for Small Business Banks Act (H.R. 2789)
- Community Bank Flexibility Act (H.R. 3287)
Click here to link to your Congressional Representative.
To contact your House member, call 202-225-3121, and ask for your Representative by name. Ask them to sign on as a co-sponsor.
Send a letter (sample text linked below by "reading more")
United States House of Representatives
Washington, D.C. 20515
As a Subchapter S community banker in your district, I write to express my strong support and urge you to co-sponsor two important pieces of legislation: the Capital Access for Small Business Banks Act (H.R. 2789) and the Community Bank Flexibility Act (H.R. 3287) which were recently introduced by Representative Kenny Marchant (R-TX).
H.R. 2789 would invigorate local economies by allowing Subchapter S banks to raise needed capital to keep serving their communities. Specifically, the legislation would:
1) Raising the limit of shareholders for S corp. banks from 100 to 500.
2) Allowing S corp. banks to issue preferred stock.
3) Preserving sound tax treatment of S corp. banks by allowing preferred stock dividends to be expensed by the bank and reorganized as income for the holder.
H.R. 3287 would provide opportunities for banks to raise needed capital and be treated like other businesses, without diminishing soundness requirements, by:
1) Allowing banks to be organized as LLCs for tax purposes.
2) Providing a five-year window for existing banks to reorganize as LLCs without going through the prohibitive tax of a liquidation.
3) Preventing unfair use of the LLC election by putting a five-year built-in gains recognition period on C corporations reorganizing as LLCs, similar to those reorganizing as S corporations; and continuing that period for S corporations that reorganize as LLCs less than five years after having been C corporations.
There are approximately 6,000 community banks across the country. Of those 6,000 banks, more than 2,100 are S Corp banks. Each one of us plays a critically important role to the nation’s economy, particularly with respect to small business lending and providing banking services in our small and rural communities. We help sustain and keep our communities vital by providing credit that results in job creation, business expansion and economic prosperity. With the implementation of Dodd-Frank, Basel III and more stringent capital requirements, access to additional capital sources and the freedom to organize in alternative forms is needed to help us thrive and survive.
I strongly urge that you demonstrate your support for community banks by cosponsoring H.R. 2789 and H.R. 3287. I also enclose a list of banks in your district that have an S Corp election in place. Thank you for your consideration.
(Your name and Bank)
Questions? Contact Amy Trevino, Executive Director Subchapter S Bank Association. Also, contact Amy for a list of Subchapter S Banks in your Congressional District or if you need additional help in locating your Congressman.
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