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Bill to prohibit plan loans through credit cards referred to Finance Committee

A bill to amend the Internal Revenue Code to provide that no loan may be made from a qualified employer plan using a credit card or other intermediary and to limit the number of loans that may be made from a qualified employer plan to a participant or beneficiary has been referred to the Senate Committee on Finance.

The bill states that qualified employer plans are prohibited from making loans through credit cards and other intermediaries. Specifically, the bill provides that a trust shall not constitute a qualified trust under Code Sec. 401 if it makes any loan to any beneficiary under the plan through the use of any credit card or any other intermediary.

Also, the bill includes a limitation on the number of loans from qualified employer plans which may be outstanding with respect to any participant or beneficiary.

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