NDAA Conference Committee Meets; CCUA CUs Well Represented

Bipartisan leadership of the Senate and House Armed Services Committees, including Rhode Island Senator Jack Reed who serves as Ranking Member of the Senate Armed Services Committee alongside Chairman Jim Inhofe of Oklahoma, met last week on the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”). The meeting served as the first meeting with committee conferees recently appointed by leadership and provided an opportunity for members to share their priorities and to continue resolving differences between the defense authorization bills passed separately by the Senate and the House. The Senate passed its version of the NDAA, S. 4049, on July 23, 2020, by a vote of 86-14. The House passed its version of the NDAA, H.R. 6395, on July 21, 2020, by a vote of 295-125.

The Association’s member credit unions are well represented on the NDAA conference committee. The following members of the Association’s congressional delegations have been appointed to serve on the committee:

  • Rhode Island Congressman James Langevin
  • Massachusetts Congressman Seth Moulton
  • Massachusetts Congressman William Keating
  • Massachusetts Congresswoman Lori Trahan
  • Massachusetts Congressman Stephen Lynch
  • Massachusetts Congressman Richard Neal

The NDAA remains an important issue for credit unions, particularly as the current Senate version of the bill contains language that would require Department of Defense (“DOD”) “policies for government depository institutions and credit unions operating on military installations to be applied equally to all such institutions”, extending rent-free access to land and facilities on military bases to for-profit financial institutions. Under current law, the Federal Credit Union Act (“Act”) grants the DOD discretionary authority to afford space on military bases at a nominal rate to credit unions who must meet certain statutory and regulatory requirements regarding the provision of financial services in the on-base facility, including that the credit union’s field of membership be composed of least 95% military personnel, federal employees, or their families. The Senate bill includes language which could extend this discretionary authority to banks for the same access to land and facilities. The House version of the legislation contains no similar provision.

Credit union concern exists over the quality of service that military members and families may receive from for-profit institutions on their bases. Not-for-profit credit unions offer reduced rates, fewer fees, and improved products. Credit unions that operate rent-free on military bases are subject to strict criteria: at least 95 percent of the membership to be served by the allotment of space 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. Further, an exemption is not guaranteed for every credit union on every military base; it is a negotiation between the base commander and a specific credit union. While the Association recognizes the important role financial institutions of all types can play for our men and women in the military in the provision of traditional financial services and in protecting troops from predatory lenders, credit unions remain concerned that this effort in the FY2021 NDAA to tie the fate of banks on the lease issue to credit unions could ultimately disadvantage credit unions and the men and women of our nation’s armed forces that they serve.

The Association will continue to monitor committee activity and weigh in with conferees on the importance of a strong democratically controlled, not-for-profit credit union presence to reinvest in members on military bases. Please send any questions or comments to govaff-reg@ccua.org.