Joint letter says banks should be exempt from rent requirements, rejects credit union arguments.
Bankers are fleeing military bases because of high rents, banking trade groups told the leaders of the House and Senate Armed Services Committee Wednesday.
Provide banks the same free rent benefits that credit unions now receive, the Association of Military Banks of America, the American Bankers Association and the Independent Community Bankers of America wrote in their letter.
“Our approach this year is simple: the language we ask you to consider will require DoD to treat banks and credit unions equally by exempting both from rent requirements,” the banking groups stated.
Backstory and Context
Anticipating the annual fight over the issue as Congress prepares to write the annual defense authorization bill, credit union trade groups recently wrote the leaders of the Armed Services Committee a letter asking them to make certain that banks do not receive the free rent benefit.
Now, the bankers have fired back.
Inside the Letter
During the past 20 years, the number of bases with banks has decreased from 130 in 2004 to 64 in 2023, the banking trade groups said. Further, the groups noted that one third of those banks are ATM-only operations and predicted that more banks will decide to leave bases this year.
“One of the principal reasons for this accelerating bank exodus has been the rising lease costs banks have had to pay—costs credit unions do not pay,” the letter reads.
And they say that credit union trade groups’ argument that unlike banks they are non-profit financial institutions simply is disingenuous.
“It is motivated, not by the lofty goals expressed in their letter to you, but by their fear of the competition and collaboration between banks and credit unions from which military families have benefited for over a century,” they wrote.
The groups said also that the Defense Department has refused to address the issue through policy.
The bankers conclude by suggesting that banking and credit union trade groups meet with Congressional staff to see if they can agree on acceptable legislative language, and to “discuss and resolve the differences that have forced this journey to be longer and more difficult than it needed to be.”