Banks Again Fail to Gain Ground on Military Bases

Credit unions once again have staved off an attempt by banks to gain rent-free access to military bases.

The House Armed Services Committee did not adopt an amendment with the base-access provision sought by banks in the National Defense Authorization Act for fiscal year 2022, which began Wednesday.

CUNA, NAFCU and the Defense Credit Union Council (DCUC) fought to exclude this provision and narrowed the language of an amendment that would direct the Defense Department to study the larger issue of financial access to service members on base.

“Thanks to strong CUNA/League advocacy credit unions successfully demonstrated their value and commitment to military members and families,” Ryan Donovan, CUNA’s chief advocacy officer, said. “There are several steps left in the process, and we will remain engaged as this bill moves closer to the finish line.”

Many credit unions were begun decades ago by service members who needed a financial institution ready to serve people who tended to have limited income and often moved frequently at the request of employers who weren’t really asking.

A letter last May from the three credit union trade groups to Senate and House committees noted that for years Congress has authorized the Defense Department, at its discretion, to allow credit unions to use land and space on military bases at a nominal rate.

“Historically, defense credit unions have been asked to remain on base to alleviate the high transactional costs coupled with poor service by other financial institutions,” the groups wrote. “It is no secret, being member-owned and not-for-profit is how defense credit unions keep interest rates low and responsive to member needs (e.g., deployment), which improves the financial readiness of our military.”

In what has become an annual ritual, banks asked to get in on that provision. NAFCU, CUNA and the DCUC worked together to keep the language out.

One point made by the credit union groups was that banks already have a way to get a branch on base. Under the Military Leasing Act, banks can obtain leases at a nominal cost if they show the Defense Department they would use their lease to serve and provide value to the men and women of the base.

The May letter said banks have not pursued that remedy, and instead “have opted to target their long-time nemesis: Credit unions.”

In the end, the House Armed Services Committee did not consider the language banks sought to allow them rent-free access to military installations.

The committee did adopt an amendment including language by Rep. Stephanie Bice (R.-Okla.) that would direct the Department of Defense to study the larger issue of financial access to service members on base.

The Senate conducted a closed markup of its version of the defense bill in July, and language expanding the Defense Department’s discretionary authority was not included. Once the House passes its version, the two bills will be reviewed by a conference committee, which will put together the final package.