Banks Threaten Military CUs; Make Stand in Senate Defense Bill

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Last week was a mixed bag of outcomes in Congress, as one chamber stood with credit unions and the other proposed to make things more difficult. The bill in question is the National Defense Authorization Act (NDAA) for 2020, which will be under consideration by the full Senate this and likely next week.

The section in question addresses a longstanding provision that allows military-base serving credit unions to provide on-base services rent-free. Section 2821 of the Senate version of the 2020 NDAA contains a harmful policy that not only grants banks parity with on-base serving credit unions, but requires the defense leadership to enact a policy of equality for credit unions and banks—and does not require base commanders to offer rent-free space.

“The degree of impact is still being assessed, although it is clear from the perspective of the Senate Armed Services Committee that it wishes to see an end of the treatment that credit unions have enjoyed since 1966,” said Jeremy Empol, vice president of federal government affairs for the California and Nevada Credit Union Leagues.

As the Senate version emerged from committee last week, the House took action on its version without any such language. In fact, prior to the House Armed Services Committee consideration, the Leagues and the Credit Union National Association (CUNA) were successful in blocking an attempt by a Mississippi congressman from introducing this type of amendment.

The pro-bank provision was withdrawn due to the efforts and collaboration of the CUNA-League system. Of the California representatives on the House committee, Reps. Paul Cook, John Garamendi and Jackie Speier (chair of the Subcommittee on Military Personnel) have all previously sided with credit unions against changing who serves military bases and how.

This year they were joined by three other California representatives who gave commitments to object to the amendment (Susan Davis, Katie Hill and Gil Cisneros). Combined with the opposition of the majority of committee Democrats, including the chair (as well as many GOP members), the author withdrew the proposed amendment knowing he was likely headed for failure.

Only two California members of the committee (Salud Carbajal and Ro Khanna) did not report back a position, but the credit union community shouldn’t assume their position was a “yes.”  With 500 – 600 proposed amendments to review and roughly 100 amendments to consider, representatives and their staffs do not always respond until votes are most likely pending.

“The House victory is promising,” Empol said. “However, the Senate language is troubling. Credit unions, whether military-serving or not, should take notice of the political maneuvering banks have taken to limit credit union powers while forcing Congress to pick sides.”

He added: “This issue is far from over. The sentiment of the House will be to strip this provision in the conference committee, which we will be rallying on over the next few months. We will be working with our full delegations to remove this provision. For the moment, however, we wanted to ensure that all credit unions are aware of this development and prepare for battle once again.”

For questions, email Jeremy Empol.

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