Fight Likely to Intensify, as House, Senate Disagree on Military Banking

It appears likely that a plan to allow banks to have the same free rent benefit on military bases that credit unions have will have to be settled later this year when House and Senate conferees meet to iron out differences in the annual defense authorization bill.

The House version of the massive bill—released Monday—does not include the rent provision. The Senate version of the bill,  which could go to the floor as early as this week, would require the Pentagon to treat banks and credit unions the same on military bases.

House Armed Services subcommittees are marking up their parts of the huge bill this week, with the full committee markup scheduled for July 1.

Credit unions now receive free rent on military bases as long as 95% of the membership served by the branch are military members. Banks, however, do not receive that benefit.

Banking trade groups have been fighting to gain the free rent benefit, saying they deserve equal treatment. However, credit union trade groups argue that credit unions are non-profit institutions, while banks are not.

The fight has gone on for several years and as in past years, it has led to high-pitched rhetoric from both sides.

“We are concerned that this language in the NDAA could essentially require that the DoD treat large mega-banks, such as Wells Fargo, the same as a military installation’s local not-for-profit defense credit union when it comes to rent on military bases,” the Defense Credit Union Council, NAFCU and CUNA wrote in a letter to senators Monday. “A long track record of consumer abuses aside, Wells Fargo’s annual revenue for 2019 was $85 billion according to news reports.”

The groups are asking the Senate to drop the provision in the Senate bill.

Providing the same benefits to banks would be counter-productive, said Tony Hernandez, president/CEO of the Defense Credit Union Council. “This means savings would not be reinvested in the community and would instead increase shareholder profits,” he said. 

Bankers, on the other hand, have accused the credit union industry of attempting to mislead members of Congress.

“Their argument this year is that if we want lease cost parity with credit unions, all we need to do is ask,” said Steven Lepper, president/CEO of the Association of Military Banks of America. “That is not true. DoD has repeatedly refused to issue a policy allowing the value of bank services to be considered ‘in-kind consideration,’ which is the only way to mitigate rent under the military leasing statute.”


Full text of letter to Sen. McConnell and Sen. Schumer from CUNA, DCUC and NAFCU on the National Defense Authorization Act for 2021

DCUC, CUNA and NAFCU Ask House Armed Services Committee to Ignore Banks’ Free Rent Request

Senate Defense Bill Requires Banks, Credit Unions to Be Treated Equally on Military Bases

Banks, Credit Unions Renew High-Stakes Battle Over Military Base Access

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