Credit Union, Anti-Corruption Groups Pleased With Override of Defense Bill

The 2021 defense authorization measure that became law over President Trump’s veto does not provide banks with the same free rent benefits credit unions receive on military bases, but does include an anti-money laundering provision that supporters said is the most important update in several years.

The Senate on Friday voted to override Trump’s veto of the massive defense bill. The House had voted on the override earlier in the week.

Credit union advocates said they were pleased that the conference report on the bill maintained the free rent benefits that credit unions have on military bases but does not extend that benefit to banks.

“DCUC has been fighting to protect defense credit unions from harmful language in the NDAA for years,” Anthony Hernandez, president/CEO of the Defense Credit Union Council, said.  “This year’s battle was another in a long line of hard-fought battles that we have won. While we take the time to celebrate this victory, we do not take it for granted and will continue advocating for our members.”

Banking groups have argued for several years that they should receive the rent benefits, contending that increasing rents have caused many banks to leave military bases.

Credit union trade groups and anti-money laundering groups also successfully fought to include a key proposal in the defense measure. That plan requires companies to disclose their beneficial owners at the time a company is formed, in an effort to rein in the use of shell companies.

“Anonymous shell companies have become the vehicle of choice for terrorist financing, money laundering and organized crime — and unfortunately, the U.S. is one of the easiest places in the world to set up these shell companies,” House Oversight and Reform Committee Chairwoman Carolyn Maloney (D-N.Y.) said.

The anti-money laundering provisions require that four pieces of information be filed by a company owner—the name of the owner, an address, date of birth and driver’s license or other identification number. The information will be reported to the Treasury Department’s Financial Crimes Enforcement Network and law enforcement agencies would have access to it if they are conducting an investigation.

“For years, experts routinely ranked anonymous shell companies — where the true, ‘beneficial’ owners are unknown — as the biggest weakness in our anti-money laundering safeguards,” said Ian Gary, executive director of the FACT Coalition, an anti-corruption group.