House Bill Requires Study on Financial Services Access on Bases

The Pentagon would be required to conduct a study on the availability of financial services on military installations, under an FY22 defense authorization bill approved by the House Armed Services Committee early Thursday.

However, the bill does not require the Department of Defense to provide the same free rent benefits to banks that credit unions now receive—a perennial hot button issue between banks and credit unions.

During the markup of the House bill, the Armed Services Committee approved an amendment proposed by Rep. Stephanie Bice, R-Okla., to add the study requirement to report language accompanying the bill.

In the report language, the Armed Services Committee said that competition helps facilitate more affordable and tailored products for consumers and protection from predatory lenders.

“Limited access to financial services, particularly for those posted at geographically isolated military installations can cause hardship for servicemembers and their families,” the committee said.

The report states that greater insight is needed into the availability of financial services and directs the Secretary of Defense to submit a report on the issue by July 1, 2022.

That report must include, among other things, “the degree to which servicemembers and other personnel that live or work on military installations have the ability to choose between different financial services providers, including banks and credit unions on military installations.” The report also must include “federal policies and regulations impacting access for financial services providers that seek to offer their services on military installations.”

Current law provides credit unions with free rent on military bases as long as 95% of the membership serviced by the branch are military members. Banks are not provided with the same benefit.

Banking trade groups have said that banks are leaving military installations because of high rents. Credit unions have argued that they are member-owned cooperatives that use their funds for the benefit of their members.

Ryan Donovan, the Credit Union National Association’s chief advocacy officer said the trade group had conferred with committee members about the Bice amendment. “We don’t believe any change in policy is needed and we worked with committee members to narrow the scope of the study so as not to divert critical resources away from defense priorities,” he said.

The Senate Armed Services Committee finished its markup in July and the free rent proposal was not included in the bill, according to CUNA, although the Senate has not released the text of its bill to the public. Donovan said that while there are many steps left before enactment of a defense authorization bill, CUNA and state credit union leagues remain “engaged and we are optimistic that there will be a positive outcome.”  


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