WASHINGTON–Three credit union trade association executives have authored a rebuttal to an opinion piece published by Military Times that called for an end to the credit union “monopoly” on branches on military bases.
As CUToday.info reported here, Rob Nichols, president of the American Bankers Association; Steve Lepper, CEO of the Association of Military Banks of America; and Rebecca Romero, president of the Independent Community Bankers of America co-authored an op-ed that argued “unequal treatment” of banks on bases is coming at a cost to military servicemembers.
In response, CUNA CEO Jim Nussle, NAFCU CEO Dan Berger, and Defense CU Council CEO Anthony Hernandez said the “focus on service to their members and their base, over profits, has led Congress to give the DoD discretionary authority to allow credit unions to use land and space on military bases at a nominal rate. Historically, defense credit unions have been asked to remain on base to alleviate the high transactional costs coupled with poor service by other financial institutions. It is no secret, being member-owned and not-for-profit is how defense credit unions keep interest rates low and responsive to member needs (e.g., deployment), which improves the financial readiness of our military. Other financial institutions simply cannot match the credit union difference.”
Banks Want ‘Handouts’
The three authors said the for-profit banks are asking for a “handout” by seeking a provision in the National Defense Authorization Act that would require DoD to treat (banks) the same as credit unions when it comes to leases.
As CUToday.info has reported, the NDAA is currently in conference committee where differences between the House and Senate versions of the bill are being hammered out. The House version does not include a provision allowing banks access to military bases; the Senate version does.
“Under the provision, DoD would not have the discretion for banks that they currently have with credit unions, if they opted to give nominal leases to credit unions they would be forced to give it to all banks, including institutions such as Wells Fargo and Bank of America, who regularly earn billions in profits,” the op-ed reads.
No ‘Fear’ of Competition
Nussle, Berger and Hernandez added banks already have the ability to obtain leases at a nominal cost under the Military Leasing Act, 10 USC §2667.
“However, banks have not exercised this authority. Instead, they have opted to end-run DoD and go to Congress to get a handout under the guise that too many banks have had to leave military bases due to the cost of leases making military banking less profitable,” the op-ed reads. “Rather than seek a productive solution available to them under current law, they have opted to target their long-time nemesis credit unions in the process.
“Defense credit unions do not fear competition from banks, especially on base, as there can be an important role for both institutions to play,” the op-ed continues. “But credit unions simply put our members first-ahead of profit. If banks want to be treated like credit unions, they need to start acting like them. Equal treatment needs to focus on service, structure and ethos, not increasing the bank’s profit sustainability. Our service members deserve more!”
The full op-ed can be found here.