HR364 proposes reducing the physical presence test for U.S. territorial tax exclusion from 183 to 122 days. This bill is in early stages (referred to Ways and Means). No spending authorization. Impact is speculative and low-conviction for most mainland companies. Pure-play territorial banks like OFG are most structurally exposed, with secondary beneficiaries being manufacturing and consumer companies with Puerto Rico operations.
→ In-migration of wealthier mainland individuals increases deposits, mortgage origination volume, and consumer loan demand in Puerto Rico, directly expanding OFG's net interest income.
HR364