CU Trades: DoD Report Settled Bank-Credit Union Military Base Issue

Credit union groups have written to the Senate saying the debate over rent benefits on military installations should be considered closed. Learn why.

David Baumann


Sep 19



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David Baumann

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Credit union groups submit letter to Senate saying debate over rent benefits on military installations should be considered closed following Pentagon study.

Armed with a study conducted by the Defense Department, credit union trade groups are urging the Senate Armed Services Committee to delete from its defense authorization bill a required briefing on why banks and credit unions are treated differently on military installations.

“This briefing is an unnecessary use of DoD’s time given the recent July 2022 publication of its report on the issue, ‘Access to Financial Institutions on Military Installations,’” the chiefs of the Defense Credit Union Council, CUNA and NAFCU, wrote in their joint letter on Friday.

That study found that servicemembers do not lack access to banking services on military installations. Under federal law, credit unions—but not banks—receive free rent on military bases as long as 95% of the credit union’s members are current or former federal employees.

Background on the Issue

Banking trade groups have been arguing for years that they deserve the same treatment as credit unions, contending that servicemembers deserve a choice in financial services. Last year, the House Armed Services Committee included in the report on its defense authorization a requirement that the Pentagon produce the study.

The House-passed version of the FY23 defense authorization does not mention the issue. The Senate Armed Services Committee’s bill requires the briefing; the full Senate has not yet considered the bill. The final measure will be hammered out in a House-Senate conference.

Credit Union Stance

Credit union trade groups contend that the issue is settled.

“Credit unions have always maintained that equal treatment needs to focus on service, structure, and ethos, not increasing the bank’s profit sustainability,” the three groups argued in their letter. “It is outrageous that large banks such as Wells Fargo and Bank of America, who regularly earn billions in profits, would expect DoD to treat them the same as credit unions when it comes to leases.”

They noted that banking trade groups contend military members are deprived of access to the financial system, an argument, they said, that was settled with the release of the DoD report.

They added that banks can apply for leases at nominal cost if they can demonstrate that the financial institution would use the lease to benefit people on the base.

“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,” the three credit union trade groups wrote. “If banks want to be treated like credit unions, they need to start acting like them."

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