Keep the ‘Status Quo’ With NDAA, CU Trades Argue

The House Armed Forces Committee is prepared to begin its markup of the FY2024 National Defense Authorization Act (NDAA) this week and credit union industry leaders have asked lawmakers to leave off any banking amendments that might encroach on credit unions’ ability to serve members on military bases.

Officials with NAFCU, CUNA and the Defense Credit Union Council (DCUC) submitted a letter to ranking members of the Armed Forces Committee Monday explaining there’s “no need to change the status quo” as it relates to adding any banking industry amendments that attempt to allow banks to operate rent-free on military bases.

“We remain opposed to any amendments from the banking lobby on Department of Defense (DoD) land leases as there are significant differences between for-profit banks and not-for-profit credit unions,” the letter stated. “We thank the Committee for recognizing these important distinctions whether it is a large commercial bank or a small community bank. More importantly, with multiple global contingencies and force structure considerations, Congress and DoD have more pressing issues to consider. Thus, we oppose the bank lobby using this critical, must-pass defense bill as a shortcut to increase their profit margins.”

CUNA, NAFCU and DCUC argue a 2022 report by the DoD found “military personnel and civilians increasingly have the option of obtaining banking services online and/or off-base” and that they are fully able to “engage in a wide range of financial services transactions with any number of financial services providers they choose at almost any time, regardless of where either party may be physically located.”

The letter added, “Thus, DoD sees no need to change the status quo which should settle this issue so the Committee can rightly move on to more urgent national security concerns. Furthermore, the ‘in-kind consideration’ process outlined in DoD’s report makes clear that lower base leases are available to ‘for-profit’ banks which would decrease their expenses if they exercised statutory provisions under the Military Leasing Act. There is little evidence of banks being denied an opportunity to work with DoD and obtain ‘in-kind consideration.’”

The fight to protect the credit union military base status has gone on for years and with much success. This year, credit union trade officials hope they have similar success.

“We see no need to consume the committee’s time in developing a legislative formula to impose on installation commanders who are busy enough preparing for combat operations,” the letter stated. “We are concerned that this effort by ‘for-profit’ banks would amount to Congressional micromanagement of individual base commanders to solve a problem that the DoD has confirmed does not exist. This is why America’s credit unions continue to earn their nominal lease structure by providing safe, sound, and available financial products and services.”