September 20, 2019

NAFCU urges NDAA committee to axe nominal lease provision

NAFCU urges Senate to remove NDAA provisionHighlighting big banks' track record of consumer abuses and record-breaking profits, NAFCU Vice President of Legislative Affairs Brad Thaler urged the FY 2020 National Defense Authorization Act (NDAA) conference committee to remove a provision that would treat banks and credit unions on military installations the same when it comes to leases. 

Thaler sent the letter Thursday as the committee held its first meeting to reconcile differences between the House and Senate versions of the bill. While NAFCU's advocacy efforts kept the provision out of the House-passed NDAA, the Senate bill includes it (Section 2821).

Bolstering NAFCU's advocacy, a bipartisan group of more than a dozen representatives recently sent a letter to leaders of the House and Senate Armed Services Committees urging the provision's removal, noting that the Department of Defense (DoD) did not ask for it to be included and has previously opposed such changes. The letter was led by House Armed Services Subcommittee Chairwoman Jackie Speier, D-Calif.

In the NAFCU letter, Thaler noted that the DoD has used its discretionary authority to lease space on military bases at a nominal rate to credit unions because of the value they bring to military members, in addition to the laws and regulations they are required to meet. Speier's letter also highlighted current laws that allow banks to seek waivers for leases on military installations. However, if enacted, Thaler warned that the provision could create consequences.

"…[W]e remain concerned that Section 2821's intent to tie the fate of banks on the lease issue to credit unions and their good work misses the mark, and would ultimately disadvantage credit unions," Thaler said. "Rather than granting nominal leases to banks and credit unions, the DoD could very well decide to stop granting nominal leases altogether. We do not want to subject the ability of defense credit unions to serve their members to the political winds surrounding big bank consumer abuses."

Learn more about what this section would mean for credit unions.

As the committee begins its discussions, Thaler called on credit unions to join NAFCU by using its Grassroots Action Center to contact lawmakers directly and urge them to oppose the provision. NAFCU has also teamed up with the Defense Credit Union Council to share the industry's concerns about the provision.

NAFCU is vigilantly monitoring the conference committee and will maintain its advocacy efforts to ensure credit unions are not disadvantaged in the final NDAA, just as it did last year. Subscribe to NAFCU Today for updates on the committee's progress.