WASHINGTON–Credit unions that operate branches on military bases overseas are not saluting the news that Navy Federal Credit Union has won a Department of Defense contract to operate The Community Bank, which has 60 branches and 275 ATMs on military bases in Europe and in the Pacific.
“(Defense Credit Union Council) has heard loud and clear about opposition from the defense credit union community directed at the DoD decision to step away from the ‘one credit union/one bank’ policy that has worked well for decades,” the DCUC told CUToday.info in a statement, referring to a Defense department policy of having one bank and one credit union serving military bases. “In addition, we are also deeply concerned that DoD has awarded a contract that apparently lacks deposit insurance for military members who would need to utilize the proposed DoD Community Bank. These are significant and unprecedented decisions and taken together, they raise significant questions for DoD to answer.”
Term to Run 10 Years
As CUToday.info reported, Navy Federal will be taking over a contract that had been held by Bank of America for some 40 years. BofA opted not to bid on the new contract, which is to run 10 years.
Navy Federal did not disclose the size of the contract, which will begin with a one-year transition period, followed by a base year and then eight additional one-year options, according to the Washington Business Journal. The branches will continue to operate under the name The Community Bank, but this time as a division of Navy Federal Credit Union, not Bank of America. The Community Bank website includes an update on the change.
‘Core of Mission’
"Supporting active-duty personnel and their families, wherever they are stationed, is at the core of Navy Federal's mission," Mary McDuffie, Navy Federal’s president and CEO, said in a statement. "We appreciate the trust the Department of Defense has placed in Navy Federal's ability to fulfill this mission."
Additional information on the contract can be found here.
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