Senators Ask Pentagon Why Credit Unions Don’t Pay Rent on Bases
Senators have asked the Pentagon to justify why credit unions (but not banks) receive rent free benefits on military bases. Learn why.
Request is part of Senate FY23 defense legislation, from which both marijuana banking and NCUA third-party vendor authority are absent.
Senators want to know why credit unions, but not banks, receive free rent on military bases, according to the just-released Senate version of the FY23 defense authorization bill.
And they want Pentagon officials to brief them on the issue by March 1.
The bill, which is awaiting Senate floor action, does not contain several House-passed provisions that would affect credit unions. For instance, the Senate bill does not contain the House-passed plan to provide credit unions and banks with a regulatory safe harbor if they provide financial services to marijuana-related businesses in states where cannabis is legal.
If that provision is not added on the Senate floor, it will have to be hammered out in a conference with the House.
The House bill says nothing about the rent benefits that credit unions receive on military installations. The House Armed Services Committee last year asked for the Pentagon to prepare a study on the issue, but that study has not yet been released.
Background to the Issue
For the past several years, banks have sought the same free rent benefits, saying the current policy is unfair and that high rents are causing banks to leave military bases. Credit unions have argued that as nonprofit institutions, they are more interested in providing financial services to servicemembers.
The Senate Armed Services Committee, in the report accompanying the bill, is asking Pentagon officials for, among other things, “A justification for any differences in the DOD (Department of Defense) policies that relate to credit unions and banks located on military installations.”
Marijuana Banking and NCUA Vendor Authority
The Senate bill also is notable for what it does not contain.
The House’s primary sponsor of marijuana banking, Rep. Ed Perlmutter, D-Colo., was successful in adding the marijuana provision to the House version of the defense bill. The House has included the cannabis proposal in several bills, including last year’s defense authorization.
So far however, the Senate has refused to accept the marijuana provision, with Majority Leader Sen. Charles Schumer, D-N.Y., saying he wants the issue to be addressed in comprehensive marijuana legalization legislation.
The Senate bill also does not include a House-passed provision that would give the National Credit Union Administration (NCUA) the power to oversee third-party vendors, nor does it contain the House’s proposal to extend pandemic-related changes to the NCUA Central Liquidity Facility.
Those issues will have to be resolved in conference committee.