Maintain Credit Union Rent Benefits on Military Bases: CU Trades

As congressional committees prepare to mark up the annual defense authorization bills, credit union trade groups are making a preemptive strike, asking the panels to ensure that credit unions maintain the rent-free benefits they have on military bases.

“Credit unions are focused on ensuring the financial readiness of our service members and their families,” CUNA President/CEO Jim Nussle said, in a letter to Armed Services Committee leaders on both sides of the Capitol.

“A number of our members are defense credit unions serving our nation’s men and women in the armed forces,” NAFCU Vice President of Legislative Affairs Brad Thaler wrote in his letter.

Credit unions receive free rent on military bases if they meet certain criteria.

Credit union trade groups have said that the House version of last year’s defense bill risked their presence on military bases and would have given banks the same benefit the credit unions receive.

After years of haggling, groups representing military banks and military credit unions last year 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.

The trade groups said that risked their benefit.

However, Steven Lepper, president/CEO of the Association of Military Banks, said at the time 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.

Credit union trade groups said the questions were caused by a drafting error in preparing the House bill.

As a result of the controversy, the House provision was dropped.

Nussle urged the committee not to consider a similar provision this year.

“CUNA and its members would be concerned with the inclusion of any similar language in the FY 2020 NDAA that would go beyond DoD’s current authority in regard to exemptions from the costs related to leases, utilities, and services on military bases for financial institutions or other more complex profit-centered entities,” Nussle wrote.

In his letter, Thaler urged the committee to “gauge the full impact of any statutory language the banks may seek on bank leases prior to supporting legislation.”

He added that all affected parties need to agree on a plan that is in the best interest of the armed forces.