WASHINGTON—The Defense Credit Union Council (DCUC) is expressing concerns over a number of banks that don’t have agreements with the Department of Defense (DoD) even as they are also working with military bases.
DCUC shared its views in a letter to the Department of Defense, alleging many of the banks have “abused” military members over the years and have not acted to protect servicemembers’ financial interests.
“On behalf of our nation's 181 defense credit unions and nearly 27 million members, the Defense Credit Union Council remains deeply concerned with the increasing number of incursions of off-base banks that are invited onto base by MWR officials,” wrote DCUC President and CEO Anthony Hernandez. “While there are ample citations governing the activity of off-base financial institutions…compliance and enforcement continues to be a challenge. These incursions have accelerated as a result of DoD Financial Readiness Network training events which feature and sanction these institutions versus those who have signed operating agreements with the installation.”
‘Troubling’ Trend
Hernandez said the trend is “troubling, since banks such as Wells Fargo, USAA Federal Savings Bank, and First Command Bank already have a dismal record of consumer abuses. Yet, these off-base banks continue to provide on-base financial education to our vulnerable servicemembers at the request of MWR officials. Moreover, the recent $85-million fine assessed against USAA Federal Savings Bank, the nation’s most visible military bank, for violations of the Military Lending Act and the Servicemember’s Civil Relief Act is particularly egregious and follows a disturbing pattern of repeat offenses.”
Hernandez pointed out the latest penalty follows a $15-million fine assessed against USAA Federal Savings Bank in January 2019 “for many of the same consumer abuses that resulted in Wells Fargo’s staggering $3 billion fine.”
“The fines and penalties assessed against the nation’s most visible military bank are an outrage since the consent order discloses multiple violations of both the Military Lending Act and the Servicemember’s Civil Relief Act. That is particularly troublesome,” Hernandez told CUToday.info. “After so many incursions onto base in violation of regulations, and now all these consumer abuses, the questions our member credit unions are asking is, ‘At what point does DoD take more corrective action against these off-base banks?”
Hernandez is asking the DoD to examine its policy and weigh whether any additional actions are warranted against these off-base banks.