16 www.azbankers.org willing to switch from banks to banks that offer cryptocurrency products. Next Steps: Watch for New Regulations The IRS will likely need to release further guidance. The amount of IRS examinations on cryptocurrency will likely expand with the Biden administration approving an increase in funding to the IRS and the creation of a new digital assets task force. Understand Tracking and Reporting of Digital Assets When you have discussions with your tax preparer, they will want to fully understand your activities. It’s highly recommended to have this information gathered prior to tax time, otherwise you could face a daunting task trying to track historical data and pull tax basis information. Tracking is necessary and important, as signified by the question on page one of Form 1040, requiring taxpayers to check a box if they sold or exchanged any cryptocurrency during the year. Many centralized and possibly even decentralized platforms that act as a medium of exchanging digital assets may suddenly be required to undergo information reporting, such as issuing 1099s similar to requirements for traditional brokerages. This may help alleviate the burden of taxpayers having to find third parties to help track their crypto transactions. The infrastructure bill also amended Internal Revenue Code (IRC) Section 6050i to also include digital assets.This means trades or businesses may now be required to include Form 8300 reporting if more than $10,000 of value in digital assets is exchanged.The prior version didn’t include digital assets. Remote Work Environment and Culture Relevant Issues: Technology, Productivity, and Mental Health Challenges Historically, the financial services industry has been one of the relationships built and maintained through face-to-face interaction. The impact of the COVID-19 pandemic greatly disrupted the industry and necessitated the restructuring of how professionals conduct business. Technology, productivity, and the mental health of teams remain among the biggest challenges as organizations continue in a remote work environment. Technology and Infrastructure While the economy is technologically progressive, the dispersion of teams due to COVID-19 requires managing and providing infrastructure for hundreds, if not thousands, of locations and people as opposed to the limited physical locations offices were typically grouped prior. This explosion of physical locations will continue to provide technical challenges for everyone moving forward. Productivity and Distractions Productivity is always top of mind for managers. The deployment of teams to a virtual workforce will continue to challenge the ability to maintain productivity at an acceptable level. Distractions such as shared workspaces with a significant other, roommate, or children and miscellaneous daily tasks and nonwork-related activities can erode productivity. Mental Health The impact of social isolation provides a major unseen challenge to all team members. Studies show everyone needs alone or downtime, but there can be significant side effects when this time isn’t wanted or is forced. These effects should be a top concern for managers as they may go unnoticed until something drastic happens. Next Steps: Analyze, Plan, Implement, Test, and Optimize Every process has a lifecycle. These phases include analyze, plan, implement, test, and optimize. For many years, businesses paid less attention to the test and optimize phases. Businesses that continue to deploy a remote work culture should Continued from page 15 continuously test, then strip down the process of how the business runs, to reanalyze and create a new plan and implementation of their workforce. A successful program starts with governance at the top and includes strategies to keep your workforce engaged and productive, as well as physically and mentally healthy. Mortgage Banking Outlook Relevant Issues: Housing Shortages, Supply Chain, and Appreciation The mortgage banking industry experienced another strong year in 2021. Historically low-interest rates allowed the refinance wave to continue. COVID-19-related legislative and regulatory action aimed at keeping homeowners in their homes largely succeeded. In a true testament to the industry, forbearance and delinquency rates continue to fall from 2020 peaks, highlighting the hard work of lenders to assist borrowers. Total mortgage originations for 2021 are projected to exceed $4 trillion, the second highest year on record, according to the Mortgage Bankers Association (MBA). A forecasted rise in rates for 2022 is expected to drive a purchase origination market. However, critical housing shortages, supply chain constraints, and home price appreciations are headwinds to growth in 2022. Mortgage Banking Industry Risks and Opportunities in 2022 and Beyond: Housing Supply and Price Appreciation U.S. housing market inventory levels are at historical lows. The MBA origination projections hinge on the ability to construct sufficient housing to meet the growing demand. Supply chain constraints coupled with labor shortages in the construction industry pose serious risks to constructing housing. These factors contribute to the significant home price appreciation experienced in the United States. Price appreciation presents a risk to growth as many buyers are firsttime home buyers.
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