State Treasurer Dale R. Folwell, CPA, announced that he is joining 23 other state treasurers, auditors and financial officers in signing a letter opposing legislation that gives the Internal Revenue Service (IRS) sweeping new powers to monitor American bank accounts with more than $600 in deposited funds. The additional IRS surveillance authority was first made public in May 2021 and is included in the $3.5 trillion spending plan currently being debated in the U.S. Congress.
“I believe that everyone should pay their fair share of taxes,” Treasurer Folwell said. “However, this proposal is an unprecedented invasion of privacy that could actually increase the problem of the ‘unbanked’ and ‘underbanked’ in America.”
Treasurer Folwell cites his own experiences growing up with few resources as the basis for his understanding of people who are either unbanked or underbanked. Unbanked Americans are those who do not use traditional banking services because they either do not have enough money or do not trust banking institutions. Underbanked households may have a checking account or savings account but rarely either. It is reported that 25% of all U.S. households are either unbanked or underbanked.
“These new IRS powers will have a chilling effect on those who already operate outside of the current banking system,” said Treasurer Folwell. “They are already frequent victims of predatory lenders and others that seek to take advantage of them because they don’t have access to traditional financial services.”
Additionally, as Chairman of the State Banking Commission Treasurer Folwell expressed his concern the new regulations would be overly burdensome and expensive for many small community banks that serve rural North Carolina, further exacerbating the financial situation. Treasurer Folwell joins more than 40 national trade associations, including the American Bankers Association, the United States Chamber of Commerce and the North Carolina Bankers Association in opposing the new powers.
The North Carolina Department of State Treasurer (DST) administers the employee retirement systems for more than 950,000 public workers, along with their 401(k), 457 and 403(b) plans. DST manages the pension plans’ investments currently totaling $121.3 billion. It also oversees the State Health Plan, which provides health care coverage to more than 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents. Fiscal assistance and expertise are provided by the department to local governmental units by aiding them in the sale of local government debt obligations and in maintaining sound budgeting, accounting and reporting procedures. The department also administers the NC Cash unclaimed property database.
For more information, visit www.nctreasurer.com.