By Brad Thaler
As I write this, bank lobbyists are hard at work distorting the facts to trick Congress into treating for-profit mega-banks the same as local, not-for-profit credit unions when it comes to nominal leases on military bases.
The Department of Defense (DoD) has the discretionary authority to lease space on military bases at a nominal rate to credit unions provided that they meet certain statutory and regulatory requirements. It is important to note that while the DoD has chosen to afford space on military bases at a nominal rate to credit unions, they are not required to do so. However, the DoD recognizes the overwhelming value that credit unions bring to our men and women in uniform by choosing to use this authority.
Unfortunately, banking trade associations are pushing Congress to require the DoD to treat large mega-banks, such as Wells Fargo and Bank of America, the same as a military installation’s local not-for-profit defense credit union when it comes to rent on military bases. To date, they have been successful in getting that language included in the Senate version of the 2021 National Defense Authorization Act (NDAA).
If enacted, this policy could cause the DoD to stop providing nominal leases completely. While both credit unions and banks play important roles for our men and women in the military, the fact remains that banks and credit unions are fundamentally different. For-profit banks focus on making money for their shareholders while credit unions focus on serving their member-owners – in this case, our military servicemembers.
The Reality
While the bankers claim that they can no longer afford to pay fair market value, the reality is that banks already have an avenue to pursue nominal cost leases under the law. In 2001, Congress gave the DoD the authority to accept “in-kind consideration” for leases on military property, including “provision of such other services relating to activities that will occur on the leased property that the Secretary concerned considers appropriate.”
If military banks were to work with the DoD, in-kind consideration could be accepted with respect to a bank lease. Over the years, credit unions have worked with the DoD to demonstrate the value their services provide. We would encourage military banks to do the same by using this existing provision, and to stop trying to take a shortcut through Congress that could harm our nation’s credit unions and the millions of servicemembers they serve.
NAFCU is leading the fight with others in the credit union industry to ensure this misguided policy does not get included in the final 2021 NDAA – and we hope you will join us in this fight.
Let us keep in mind that it took a New York Times article to convince Wells Fargo to publicly state how it would help its customers coping with the financial ramifications of the 2019 partial government shutdown. This is in addition to the banking industry’s $243 billion dollars in fines racked up since the 2008 financial crisis and its laundry list of consumer abuses.
Speaking Directly
With bankers circulating misinformation on this issue, it is important policymakers do not ignore the facts. Treating for-profit mega banks the same as local, not-for-profit credit unions on military bases would not benefit our nation’s servicemembers – period.
As credit union leaders join NAFCU to advocate virtually in Washington, D.C. this week, we will speak directly with lawmakers to ensure they strike the banker-sought provision from any final bill.
This is what we do at NAFCU: We fight for credit unions, their 121 million members, and our local communities.
Brad Thaler is vice president of legislative affairs with NAFCU.