Removing Barriers Blog

CUNA joins trades in letter to House Armed Services Committee
Posted June 14, 2020 by CUNA Advocacy

Last week, CUNA joined the Defense Credit Union Council and NAFCU in writing to leadership of the House Armed Servies Committee pushing back against banker requests for an increased military base lease exemption in this year’s National Defense Authorization Act (NDAA).

Credit unions are eligible for an exemption that allows for the waiving of certain fees and land lease costs for credit unions on military installations. The Senate Armed Forces Committee passed their version of the NDAA with a provision requiring the Department of Defense (DoD) to consider for-profit banks the same as credit unions.

“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. 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,” the letter reads. “Other financial institutions simply cannot match the credit union difference.”

The letter adds that banks already have the ability to obtain leases at a nominal cost under the Military Leasing Act if they can demonstrate to DoD how they would use their lease to serve and provide value, but have not exercised this authority.

“Defense credit unions do not fear competition from banks, especially on base, as there can be an important role for both institutions to play. But credit unions simply put our members first—ahead of profit. If banks want to be treated like credit unions, they need to start acting like them,” the letter reads. “Equal treatment needs to focus on service, structure and ethos, not increasing the bank’s profit sustainability. Our servicemembers deserve more.”