WASHINGTON—An alternative approach is being advocated by America’s Credit Unions to a proposed amendment to the House FY2025 National Defense Authorization Act (NDAA).
The amendment would clarify military members under the Department of Defense’s Overseas Military Banking Program (OMBP)—but only OMBP members—are insured by the National Credit Union Share Insurance Fund (NCUSIF).
The issue has come to the forefront in Congress after Navy FCU won the contract to operate the Department of Defense’s banking operations on military bases overseas. Navy Federal had sought NCUSIF insurance on those deposits, but NCUA rejected that option. The world’s largest credit union turned to Excess Share Insurance to provide the coverage.
More Than 1,000 Amendments
The ACU letter was sent to Reps. Pete Sessions (R-TX), Young Kim (R-CA) and Gerry Connolly (D-VA) who submitted the amendment, which is currently among around 1,200 others currently being considered by the House Rules Committee.
“While the language will solve the particular problem of federal share insurance for the OMBP, it still leaves open the question about future situations where a credit union may act as a fiscal agent in other capacities for DoD or the broader federal government,” wrote ACU President Jim Nussle, adding it would be more appropriate to amend the Federal Credit Union Act to clarify that all credit union accounts provided as a fiscal agent in a government contract can be insured through the NCUSIF.
Nussle and ACU suggested text that would also establish an advisory panel on military banking to review the OMBP and the general availability of financial services to members of the armed forces.
Letter Sent on ‘Inaccurate’ Narratives
Separately, Nussle wrote to Speaker of the House Mike Johnson (R-LA) and House Minority Leader Hakeem Jeffries (D-NY) to address “inaccurate and misleading narratives” surrounding the Federal Credit Union Act and the credit union tax status.
“Allowing credit unions to help our government serve those who protect us does not place the credit union tax exemption in jeopardy,” he wrote. “While we are working with the amendment sponsors to address concerns about their approach in the amendment, America’s Credit Unions remains committed to working with Congress to find a solution that allows credit unions to enjoy the same protections as banks when acting as fiscal agents for the government in this or other instances.”
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