Anti-Money Laundering Provisions Move Forward as CU Military Base Benefits Stall

While the negotiations over the annual defense authorization bill remains stalled over a hot-button issue on the renaming of military bases, credit union trade groups have continued to push two provisions they want included in any final conference report.

It appeared they have succeeded in one of those efforts. Congressional negotiators said they will include anti-money laundering provisions in the measure.

However, the issue of whether banks should receive the same free rent benefits on military bases that credit unions now receive remains unresolved.

President Trump has threatened to veto any defense bill that calls for the renaming of military bases that currently are named after soldiers that fought in the Confederacy. The House and Senate versions of the defense bills call for those installations to be renamed.

But the conferees have accepted long-sought-after anti-money laundering provisions that would require companies to disclose their true, beneficial owners at the time the company is formed. House Oversight and Reform Committee Chairwoman Carolyn Maloney (D-N.Y.) has been pushing proposals to fight anonymous shell companies since 2009 and has introduced legislation every Congress since then.

“The bill will finally allow law enforcement to follow the money in their investigations, and will prevent terrorists, kleptocrats and other bad actors from using the U.S. financial system to hide their dirty money,” Maloney said.

The banking fight is a perennial battle between banking and credit union trade groups. The Senate version of the defense bill called for banks to be extended the same rent benefits as credit unions, but the House did not include a similar provision in its bill.

“Credit unions are structured differently and are committed to service over profit, which is why credit unions are treated differently by the Department of Defense,” the Defense Credit Union Council, CUNA and NAFCU said in a joint letter to conferees last week.

The credit union groups contended that large banks such as Wells Fargo and Bank of America have made record profits, while being fined and penalized for consumer law violations.

“We remain concerned that this effort in the FY2021 NDAA to tie the fate of banks on the lease issue to credit unions could ultimately disadvantage credit unions and the men and women of our nation’s armed forces that they serve,” the credit union trade groups said. And they warned that if the provision is not “carefully considered,” it could force all financial institutions off military installations.

However, the Association of Military Banks of America, which has lobbied hard on this issue for several years, said banks simply are looking for the same benefits as credit unions. The group has warned that as rents increase, banks will continue to choose to move off the bases.