In an American Banker op-ed today, American Bankers Association President and CEO Rob Nichols and Association of Military Banks of America President and CEO Steve Lepper condemned a recent move by the National Credit Union Administration to designate all active-duty personnel as low income. Doing so would effectively allow major credit unions—such as Navy Federal and PenFed—to immediately qualify as low-income institutions and gain the regulatory benefits reserved for true low-income credit unions, such as the ability to seek secondary capital investments, expanded limits on nonmember deposits and the removal of a statutory business lending cap.
“None of these changes offers any tangible benefits to financially struggling service members,” Lepper and Nichols said. “In fact, these gifts make it more likely that the mega credit unions will simply expand their non-military revenues. . . . If Washington truly wants to help struggling military personnel and their families now, there is a far better solution ready and waiting: Congress can expand service members’ financial service choices by incentivizing more banks to operate on military bases.”
Currently, tax-exempt credit unions are permitted to operate rent-free on military bases, while taxpaying banks do not, the CEOs noted. “As the Senate and House begin their work reauthorizing the National Defense Authorization Act, lawmakers must make this sensible change and push back against credit union lobbying that only limits the financial choices for service members and their families.”