Bankers Push Plan to Cut Free Rent for Military Credit Unions

Banking trade groups are urging House and Senate conferees on the annual defense authorization bill to retain a provision that could provide free rent to banks on military bases but could eliminate the benefit for credit unions.

“Keeping [the section] as part of the final conference package would allow for the full complement of financial services needed by our military communities,” officials from the Association of Military Banks of America, the American Bankers Association and the Independent Community Bankers of America, said in a letter to the conferees.

“Over the past ten years, 50 military bases have lost their only banks,” the bankers said. “This exodus has left many military communities with the options of only being served by non-regulated establishments off base or a credit union on base, depriving them of a choice in secure financial institutions.”

However, credit union officials and a bipartisan group of House members said that section, contained in the House version of the defense bill, was drafted incorrectly and refers to “insured depositor institutions,” a term that does not include credit unions.

Conferees are meeting to resolve differences in the huge annual defense bill.

Credit unions have received free rent on military bases for several years and bankers have been fighting for the benefit.

This year, military credit unions and military banks reached agreement on a proposal to provide free rent to banks.

However, the drafting error appears to have torn that deal apart.

Military credit unions have urged the conferees to simply eliminate the House provision, which could preclude banks from obtaining the rent benefit.

And bankers have urged the conferees to retain the House plan, which could provide banks with the benefit, but eliminate free rent for credit unions.