Lawmakers are trying to reverse a Treasury Department notice allowing for bigger tax writeoffs during a bank's acquisition.
Rep. Lloyd Doggett, D-Tex., of the House Ways and Means Committee, and Sen. Bernie Sanders, D-Vt., of the Senate Budget Committee, each proposed legislation last week that would prevent an acquiring bank from writing off a target's loan losses after the purchase.
The bill seeks to nullify a notice issued by the Treasury on Sept. 30 to let banks write down their acquisitions' loan losses, amending a section of the tax code that ordinarily prohibits the practice.
Several high-profile bank deals have involved use of the exception, including Wells Fargo's purchase of Wachovia and PNC Financial's of National City.
"The Treasury Department clearly exceeded its authority in its effort to subsidize bank mergers — and at the expense of taxpayers," said Rep. Doggett in a press release Thursday.
