WASHINGTON–The credit union trade groups are looking to preemptively head-off what has become an annual issue in Congress: the insertion of language in the defense spending bill that gives banks equal access to military bases as credit unions.
CUNA, NAFCU and the Defense Credit Union Council have submitted a joint letter to the Senate Committee on Armed Services urging it to reject the inclusion of any such language in the 2022 National Defense Authorization Act (NDAA).
In the past several sessions of Congress language giving banks access to military bases has been included in the Senate version of the NDAA and not included in the House version. Following strong credit union advocacy, the language was removed from the final version of the bill.
“Defense credit unions continue to serve our nation’s servicemembers and their familiesexceptionally well,” the letter states. “As member-owned, not-for-profits, defense credit unions focus is providing quality financial services to our men and women in uniform. This focus on the servicemember is evident whether it involves opening a checking account,obtaining low- interest credit, or learning how to properly save for retirement—defense credit unions proudly serve their communities while protecting against financial predators outside the gate.”
Focus on Base Over Profits
The letter notes defense CUs manage the Department of Defense’s (DoD) substantial cashrequirements without charge, and assume responsibilities for the government’s daily deposits into the Treasury General Account, such as commissary, post exchange and MWR activities, doing so on a not-for-profit basis – with their bottom line being service, not theirshareholders.
“This focus on service to their members and their base, over profits, has led Congress togive the DoD discretionary authority to allow credit unions to use land and space onmilitary bases at a nominal rate,” the letter states. “Historically, defense credit unions have been asked to remain on base to alleviate the high transactional costs coupled with poorservice 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 financialinstitutions simply cannot match the credit union difference.”
“Unfortunately,” the letter continues, “for-profit banks are continuing to ask Congress for a handout by once again seeking a provision in the 2022 National Defense Authorization Act that would require DoD to treat them the same as credit unions when it comes to leases. It isalarming that large banks such as Wells Fargo and Bank of America, who regularly earn billions in profits, would be equal to not-for profit credit unions if such a provision were to become law.”
MLA Offers Banks Opportunity
CUNA, NAFCU and the DCUC told the Senate that while banks are calling for “parity” on the issue, they already have the ability to obtain leases at a “nominal cost” under the Military Leasing Act by demonstrating to DoD how they would use their lease to serve and providevalue to the men and women of the base.
“However, banks still have not exercised this authority,” the letter states. “Rather than seek a productive solution available to them under current law, they have opted to target their long-timenemesis credit unions in the process.”