The Trump administration may allow banks to treat NFL stadium financing as aid for the poor - and they could even get a big tax break
- The Trump administration is weighing a decision that could allow banks to treat NFL stadium financing as aid for the poor.
- They could even get a hefty tax break out of it.
- Bloomberg News first reported that the proposed rule change unveiled by two regulators appointed by President Trump.
- Banks are legally required to invest some of their money in low-income neighborhoods, and the regulators outlined a variety of ways that financial institutions could meet their obligations under the Community Reinvestment Act.
- Investors funding the projects can delay tax or reduce tax payments on their capital gains.
- More than a dozen athletic stadiums currently exist in the opportunity zones, most of which are located in low-income areas.
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The Trump administration is weighing a decision that could allow banks to treat NFL stadium financing as aid for the poor. They could even get a hefty tax break out of it.
Bloomberg News first reported that the proposed rule change unveiled by two regulators appointed by President Trump.
Banks are legally required to invest some of their money in low-income neighborhoods, and the regulators outlined a variety of ways that financial institutions could meet their obligations under the Community Reinvestment Act. Investors bankrolling the projects can delay tax or reduce tax payments on their capital gains.
The 1977 law - designed to encourage bank lending to struggling areas - is currently undergoing its most drastic overhaul in over two decades. The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are the two agencies overseeing the process. The Federal Reserve must also sign off on the reforms, but its balked at them so far.
Bloomberg noted the one-sentence proposal in page 100 sandwiched between other possible reforms: "Investment in a qualified opportunity fund, established to finance improvements to an athletic stadium in an opportunity zone that is also an LMI census tract," referring to low and middle income neighborhoods (LMI).
More than a dozen athletic stadiums currently exist in the opportunity zones, most of which are located in low-income areas. Some examples include the M&T Bank Stadium in Baltimore and the Empower Field in Mile High in Denver, Colorado. They're home to the Baltimore Ravens and Denver Broncos, respectively.
Critics have argued that stadium development projects unfairly impact communities of color and contribute to their displacement while at the same time drain taxpayer money to expensive upgrades. Still, supporters view them as an economic boost to the cities they're built in.
Steve Glickman, an expert on economic opportunity zones, told Bloomberg the reference to stadiums was "weird" but said banks will be engaged throughout the reform process.