Legislative Update with Kenley

The IRS proposed rules for the new auto loan interest deduction, while DakCU tracks key bills as SD’s 2026 legislative session begins and invites to Legislative Day on February 11.

IRS Issues Proposed Rule Implementing New Auto Loan Interest Deduction
The IRS has released a proposed rule outlining how the new auto‑loan interest deduction under H.R. 1 will work for tax years 2025–2028. The proposal places reporting responsibility on the lender and is intended to reduce duplicate reporting in indirect and assigned‑loan structures.

For indirect lending, the rule explains how assignees should determine and report required information. It also clarifies how refinances are treated, capping deductible interest at the outstanding principal at the time of refinance.

The proposal further spells out reporting mechanics, including reporting interest paid for the year and providing principal‑balance snapshots. It also establishes allocation rules to separate qualifying vehicle‑loan amounts from non‑qualifying amounts such as negative equity.

South Dakota Legislature Convenes as DakCU Begins Tracking Key 2026 Session Bills
South Dakota lawmakers return to Pierre next week as the 2026 legislative session gets underway. The Dakota Credit Union Association’s Government Affairs Committee is already tracking several measures expected to surface early in the session.

DAKCU will release weekly updates outlining key bills and the association’s position on each. For now, the GAC is closely monitoring a proposal dealing with property data collectors, with additional legislation expected as committees begin their work.

More details will be shared as bills are formally introduced and hearings are scheduled.
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Event Reminder: South Dakota Credit Union Legislative Day – February 11
Join us in Pierre on February 11 for South Dakota Credit Union Legislative Day! We’ll start the morning at the Capitol with coffee and donuts for legislators, followed by the SD GAC annual meeting, a group photo in the Rotunda, and formal introductions on the House and Senate floors. Later in the day, we’ll host a Legislative Leadership Panel and wrap up with a networking social to strengthen relationships with lawmakers and fellow credit union advocates.

Please note: The room block at the ClubHouse Hotel and Suites is now full.
If you still need a room, please reach out to me directly at [email protected] and I will help secure an additional room.

Stay Connected
For more information or to share your perspectives, feel free to contact me. ​