The OBBB Act: How It Is likely to Impact Lenders and Borrowers

The OBBBA contains hundreds of provisions—many of them related to taxes.  For example, it permanently extends the individual tax rates Trump signed into law in 2017, which were set to expire at the end of 2025. It raises the cap on the state and local tax deduction to $40,000 for taxpayers making less than $500,000, with the cap reverting to $10,000 after five years. OBBB includes several tax deductions for tips, overtime pay, auto loans, and creates Trump Accounts, allowing parents to create tax-deferred accounts for the benefit of their children, all set to expire in 2028. It includes a permanent $200 increase in the child tax credit, a 1% tax on remittances, and a tax hike on investment income from college endowments.   However, It phases out some clean energy tax credits that were included in the Biden-era Inflation Reduction Act, and promotes fossil fuels over renewable energy. It increases a tax credit for advanced semiconductor manufacturing and repeals a tax on silencers

It raises the debt ceiling by $5 trillion. It cuts  Medicaid spending by 12% and expands work requirements for SNAP (food stamp) benefits) recipients and makes states responsible for some of the SNAP costs.  OBBB includes $150 billion in new defense spending and another $150 billion for border enforcement and deportations. The law increases Immigration and Customs Enforcement (ICE) funding from $10 billion to more than $100 billion by 2029.

• Learn the components of the OBBB Act
• Assess the likely consequences of the components on clients and borrowers
• Evaluate the likelihood of the components actually being implemented
• Gain perspective on the costs and benefits of the components
• Review the pros and cons of the Act’s components

• Tax deduction for qualified overtime income
• Tax deduction for qualified tip income
• Tax deductible for loan interest for U.S.-assembled cars
• Increased limit for tax deductions for state and local taxes
• Tax credit for seniors
• Child tax credit
• Charitable contributions tax deduction

• Tax deduction for executive compensation
• Depreciation tax deduction
• Domestic research and experimentation tax deduction
• Business interest tax deduction
• Tax deduction for pass-through entities
• Tax credit for semiconductor manufacturing
• Tax credits for affordable housing and poorer neighborhoods
• Deductions for certain workers’ meals
• Metallurgical coal tax credit
• Charitable contributions tax deduction
• Foreign-derived intangible income
• Tax deduction for whaling

• Excess compensation

• College endowments

• Employer-provided childcare credit
• Dependent Care Flexible Spending Accounts
• Paid leave while on Family and Medical Leave Act leave
• Health savings accounts

• Credit Analysts
• Credit Managers
• Loan review officers
• Work-out officers
• Commercial lenders
• Credit Risk Managers
• Chief Credit Officers
• Senior Lenders
• Senior Lending Officer
• Bank Director
• Chief Executive Officer
• President
• Board Chairman
• Finance and accounting personnel

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek principal of Devon Risk Advisory Group based near Atlanta, Georgia.  Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc.  Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC).  PCC’s purpose is to evaluate and recommend to FASB revisions to current and proposed generally accepted accounting principles (GAAP) that are more appropriate for privately held firms.  He also serves as the PCC’s representative to FASB’s Credit Losses Transition Resource Group supporting the new current expected credit loss (CECL) standard to be implemented in fiscal year 2019 for public companies and 2020 for private firms.

The former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. He also spent three years as managing director and credit approver in SunTrust’s Florida commercial lending and corporate investment banking areas, respectively. Prior to SunTrust, he was chief credit officer for Barnett Bank’s Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, his experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor.

A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, Dev earned his M.B.A. from the University of Hawaii. Mr. Strischek serves as an instructor in several banking schools, including the Stonier Graduate School of Banking, and the Southwest Graduate School of Banking. His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.

Mr. Strischek has written some 200 articles on credit risk management, financial analysis and related subjects, and he is the author of Analyzing Construction Contractors and instructor of  a contractor analysis workshop. A past national chair of RMA and former RMA Florida Chapter president, Dev has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department’s Financial Service Volunteer Corps (FSVC).