The Compliance Implications of H.R. 1 - One Big Beautiful Bill Act
The U.S. House of Representatives passed H.R. 1, One Big Beautiful Bill Act (the "Bill"), on May 22, 2025. Below are several provisions within the bill that could impact credit unions and their compliance obligations. Keep in mind that the legislation now moves to the Senate, which is expected to make some changes. Once the Senate makes their changes, the two bills must be reconciled and passed by both chambers before being signed into law by President Donald Trump. Without further ado, here are the main provisions that affect credit unions and their compliance programs.
Excise tax on executive compensation for tax-exempt organizations
Under the Tax Cuts and Jobs Act, current law imposes an excise tax on "excess" compensation paid to certain highly compensated employees by applicable tax-exempt organizations. This was limited to the top 5 employees who make over $1 million annually (including annual compensation and deferred compensation payouts). The new bill applies the excise tax to all employees making over $1 million annually. This is unlikely to affect the vast majority of credit unions. Here is a member only FAQ on this excise tax put together by America's Credit Unions' Regulatory Advocacy Team.
Excise tax on remittances
The Bill places an excise tax of 3.5% on remittances made by non-U.S. citizens to other countries, to be collected by the entity sending the remittance. Under the Bill, credit unions that offer remittance services will have to collect and send the taxes to the government and they will have to provide paperwork to U.S. citizens who will claim a tax credit on their annual taxes for any remittance taxes they paid. The Compliance Team has published a member only FAQ on this issue that can be found here.
Excise tax on parking and transportation benefits
The Bill adds a new excise tax on parking and transportation benefits. This provision amends the tax code to increase the unrelated business taxable income of a tax-exempt organization by including the amount paid or incurred for any qualified transportation fringe benefit, including parking. While this isn't a traditional financial institution compliance issue, this may be a tax compliance issue that the credit union will need to watch out for.
Long term savings accounts or "Trump accounts"
The Bill adds a new type of account that credit unions can offer. These "Trump Accounts" are very similar to 529 college savings plans. Amounts in Trump Accounts would be required to be invested in equity investments. However, similar to a 401k and 529 plan, funds could be used for education, homeownership, entrepreneurship, etc. Credit unions will be able to offer these accounts to members, though they may have to work through a CUSO or third-party provider to offer the product.
"No Tax on Overtime"
The Bill includes a "no tax on overtime" provision that allows a deduction in an amount equal to the qualified overtime compensation received during a tax year. Notably, this provision will require employers to include the total amount of qualified overtime compensation in a W-2. Similar to the tax on transportation/parking benefits above, this is not a traditional financial institution compliance issue. This is a pure administrative function and is unlikely to be a huge burden, but it will change payroll processing and withholding.
Regulatory modernization and efficiency
The Bill also adds a provision that Office of Management and Budget shall pursue regulatory modernization and efficiency at a number of agencies, including the CFPB. While it is unclear what will change from this provision, it will likely continue to put pressure on the CFPB to reduce regulatory burdens.
As noted above, credit unions should be aware that the above may change now that the Senate is reviewing the Bill and drafting their own version. Stay tuned, America's Credit Unions is monitoring the situation and will notify credit unions as changes occur.
If you have any compliance questions regarding this bill or any other compliance questions in general, please email the Compliance Team at compliance@americascreditunions.org
