What's at Stake With CU Legislative Error? Depends Who You Ask

Military bankers are disputing the notion that a section of the House defense authorization legislation would eliminate the free rent benefit that credit unions now have on military bases.

Instead, the House provision would establish parity between banks and credit unions, said Steven Lepper, president/CEO of the Military Banks of America.

“If it passes, it will simply provide banks the same benefit credit unions have enjoyed for over a decade and, thereby, will eliminate the single biggest factor compelling banks to leave military bases,” he told CU Times.

At issue is a provision of the House bill that would provide rent benefits to “insured depository institutions.” The definition of that term does not include credit unions and has been attributed to a drafting error.

As a result, some credit union officials and members of the House Armed Services Committee have urged conferees on the massive defense bill to drop the House provision. Dropping the provision would eliminate the rent benefit for banks.

Lepper said that the rent benefit provided to credit unions is contained in the Federal Credit Union Act and begins with the phrase, “notwithstanding any other provision of law.”

He said the House defense provision would have no impact on the credit union rent benefits.

“What this means is that, unless that provision is repealed, it will remain despite any future legislative action,” he said.