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|National Defense Authorization Act FY2021|
Ongoing - The Senate Armed Services Committee passed its version of the NDAA (S. 4049) on June 23, 2020. Senate debate is ongoing.
DCUC opposes section 2885 in the Senate Version of the FY2021 National Defense Authorization Act (S. 4049) which would require the Department of Defense (DoD) to treat “for-profit” banks as “not-for-profit” institutions so banks can obtain the same no-cost land leases, as an ultimatum for banks remaining on installations. Yet, there are no restrictions on how banks would use these savings.”
After years of negotiation with the Department of Defense and through amendment of the Federal Credit Union Act in 1996, Credit Unions - at the discretion of the base commander - may be exempted from the costs associated with leases, utilities, and ATM placement on military installations. This exemption is limited to credit unions if at least 95 percent of the membership to be served by the allotment of space or the facility built on the lease land is composed of individuals who are, or who were at the time of admission into the credit union, military personnel or federal employees, or members of their families. This exemption is not guaranteed for every credit union on every military base. It is a negotiation between the base commander and that specific credit union.
Banks already have the ability via 10 USC §2667 to obtain the same type of waiver for rent. However, banks have not exercised this clause. Instead, the banking industry has sought “parity” for no cost land leases through the NDAA, arguing that credit unions and banks are the same and, therefore, deserve the same benefits. This stance ignores the non-for-profit foundation of the credit union industry as well as the numerous restrictions credit unions must follow. It also ignores the fact that as a member-owned financial institution, defense credit unions give back to the same military communities that they are embedded in, not a third-party shareholder.