Congress quietly hands banks a $billions tax break disguised as small-business bill

What it does

This bill allows certain financial institutions—primarily banks and bank holding companies—to carry forward net operating losses (NOLs) for up to 20 years, and in some cases carry them backward to prior years, to offset future or past taxable income. The bill creates a special tax election available only to these financial institutions for losses incurred between 2027 and 2029 and beyond, effectively allowing them to reduce their federal tax liability by spreading losses across decades.

Why we flagged it

The bill's functional purpose is to provide a selective tax benefit to banks and bank holding companies through extended net operating loss carryover and carryback provisions. Despite the title invoking 'Small Business and Consumer Credit,' the actual mechanism targets only large financial institutions, not small businesses or consumers.

What the text implies

• The bill's title ('Small Business and Consumer Credit Act') does not reflect its actual mechanism—it is purely a tax subsidy for financial institutions with no stated connection to small business lending or consumer credit expansion.
• The selective eligibility (banks not in certain affiliated groups, plus specific bank holding companies) creates a narrow carve-out that may benefit some large regional and community banks while excluding others, suggesting potential lobbying by specific institutions.
• The 20-year carryforward window is substantially longer than the standard 5-year NOL carryforward available to other businesses, creating a permanent competitive tax advantage for the named financial sector.
• The retroactive application to losses beginning in 2027 (before the bill's 2026 enactment) suggests the provision may be designed to capture anticipated losses from a known economic event or regulatory change.

Who it affects

This bill provides a targeted tax subsidy to financial institutions at the expense of general taxpayers. By allowing banks and bank holding companies to carry losses forward and backward in ways unavailable to other businesses, it reduces the tax revenue available for public services while concentrating the benefit narrowly among a small set of large financial firms.

Who stands to gain

• banks (regional and community banks not in certain holding company structures)
• bank holding companies
• insurance companies with banking operations

Named in the bill

AIG, FBK (Flagstone Bank), FMAO (Farmers & Merchants Bancorp), PFG (Principal Financial Group), PRU (Prudential Financial), Internal Revenue Code Section 172, Bank Holding Company Act of 1956, House Committee on Ways and Means

Where it stands

11 cosponsors: 6 Democrats, 5 Republicans.

• Jun 22, 2026 — Introduced · Congress.gov: “Introduced in House”
• Jun 22, 2026 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

6 lobbying clients named this bill on 6 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $5,340,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 82% of bills with at least one filing.

Mike Carey, the sponsor, reported $1,809,017 in PAC receipts in the 2026 cycle. $20,000 of that came from 2 PACs tied to these lobbying clients.

• American Bankers Association — $3,510,000 on 1 filing
• Capital One Financial Corporation — $1,240,000 on 1 filing
• Synchrony Financial — $430,000 on 1 filing
• Capital One Financial Corporation — $70,000 on 1 filing
• Capital One Financial Corporation — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.