Defense Deal: Credit Unions, Not Banks, Get Free Rent on Bases
CUNA officials say they are relieved by the decision.
Conferees on the massive annual defense authorization have dropped a plan to provide military banks free rent on military bases—leaving credit unions the only financial institutions receiving that benefit.
The FY19 defense authorization deal simply drops a House provision that some credit unions said would have posed a threat to their longstanding rent benefit.
The conference agreement now goes to the House and Senate floors.
After years of haggling, groups representing military banks and military credit unions had agreed that banks could receive the same benefit extended to credit unions.
However, when the House bill was drafted, Section 2808 specified that “insured depository institutions” would be eligible for free rent on bases. The definition of “insured depository institutions” does not include credit unions.
The Senate version of the bill did not address the issue.
CUNA officials have said that the definition could have placed the benefit that credit unions receive at risk.
However, Steven Lepper, president/CEO of the Association of Military Banks, said that was not the case. He said the rent benefits are provided for in the Federal Credit Union Act and they would not be affected by the House proposal.
Lepper did not respond to requests for comment concerning the conferees’ decision.
Still, CUNA officials said they were relieved by the conferees’ decision.
“While we believe this was an unintended drafting error, the blanketed term may have put hundreds of military credit unions in jeopardy,” said CUNA President/CEO Jim Nussle. “Because of their cooperative, not-for-profit structure, credit unions should continue to receive unrestrained but discretionary access to military installations.”
The issue is complex and deserves closer examination, Defense Credit Union Council President/CEO Anthony Hernandez, said.
“We look forward to working with the Armed Services committees in the House and Senate in preserving the overall Military Banking Program so that Defense Credit Unions can continue to serve our military members and their families while protecting them from predatory lending practices outside the gate,” he said.