Banks, Credit Unions Fight Again Over Free Rent on Military Bases

The battle between bank and credit union access to military bases has flared once again, as both sides said they expect Rep. Trent Kelly (R-Miss.) to offer an amendment to the annual defense authorization bill to give banks the free rent benefit that credit unions now enjoy.

The House Armed Services Committee will begin its markup of the defense bill on Wednesday. Banking and credit union sources said at that time, they expect Kelly, a member of the committee, to introduce his amendment, although a Kelly aide did not respond to a request for comment.

“We expected this,” Anthony Hernandez, president/CEO of the Defense Credit Union Council said Tuesday.

Credit unions now are given rent-free space on military bases, while banks must pay rent. The two sides have been battling for several years on the issue and past attempts at a compromise have failed.

The Senate Armed Services Committee already has marked up its version of the annual defense bill, but the bill’s text has not yet been released.

One source familiar with the legislation said the Senate bill “requires the Department of Defense to ensure that policies governing depository institutions and credit unions operating on military installations are equally applied to all relevant institutions.”

Banking groups have thrown their support behind Kelly’s effort.

In a letter to Kelly, the American Bankers Association, the Independent Community Bankers of America and the Association of Military Banks of America said the plan would “treat banks and credit unions operating on military installations equally, allowing for the full complement of financial services needed by our military communities.”

They said that banks have left military bases, depriving servicemembers from choices they need.

“I don’t understand this parity argument,” Hernandez said, adding that credit unions are not-for-profit institutions that uses funds for the benefit of its members.

He said there have been many reports of banks earning record profits, adding that if a for-profit bank is given free rent, other for-profit institutions also would seek rent-free space.

“I think the status quo works just fine,” he said.