The men and women who serve our country in uniform deserve the deep appreciation of the American people. Given the sacrifices they make for the nation, they also deserve every possible advantage we can provide them when it comes to taking care of their families.
One of the biggest challenges of military service is achieving financial stability and resilience. Moving every couple of years is expensive and precludes many military spouses from developing the kinds of careers other two-paycheck American households enjoy. Add the constant threats posed by predatory financial actors — payday lenders, pawn shops, used car dealers — lining the roads outside most US military installations and you have a formula for financial ruin.
Over many years, Congress has recognized that it must not only pay our troops a fair, living wage, it must also protect them from financial predators. The Servicemembers Civil Relief Act and the more recent Military Lending Act are examples of Congress’ efforts to help our military families keep and grow the money they earn. In these and other ways, lawmakers promote the financial stability and resilience of our armed forces.
In the next few weeks, Congress will again consider an important piece of legislation that, if passed, will add to its legacy of promoting the financial health of our military communities. The proposal, already included in the Senate’s version of the 2020 National Defense Authorization Act, would expand access to financial services for military families and Department of Defense employees across the country by encouraging more banks to operate on military installations.
With the first military bank opening at Fort Leavenworth in 1907, banks of all sizes have a long and proud history of serving military families, veterans and DoD employees. Unfortunately, over the past 15 years, rising rent and other government-imposed costs have forced banks to leave over 40 percent of U.S. military bases. At the same time, DoD does not ask credit unions to pay rent on post even though they typically offer similar services as banks. It should also be noted that unlike banks, credit unions pay no federal income taxes.
As a result of this unequal treatment, today there are just 75 banks operating on DoD installations; three-fourths of those institutions are smaller, community banks trying their best to simply serve their local customers. The Senate version of the NDAA, authored by Senate Armed Services Committee Chairman James Inhofe, finally ends that inequity by requiring DoD to treat banks and credit unions equally for the benefit of military members and their families.
This change simply means that if DoD chooses to charge or waive rent for credit unions, it must do the same for banks.
Unfortunately, the credit union lobby opposes this legislation because they know it will end their growing monopoly at bases across the country and force them to compete for service members’ business. Indeed, the DoD’s longstanding “one bank, one credit union” policy recognizes that having both on military installations promotes choice and provides military families with the most comprehensive and competitive financial services possible. Military families understand the value of having both on bases as well. In a 2017 Military Saves survey, 59 percent of respondents regarded banks and credit unions as their most helpful sources of financial information.
In addition, The Military Coalition recognizes the value of banks and credit unions operating together on military bases. This consortium of 34 military and veteran service organizations representing more than 5.5 million members of the armed forces and their families has voiced its support for Senator Inhofe’s proposal because the coalition understands that financial institution choice is good for military families.
Americans outside the gates of most military installations have a choice when it comes to financial services. Unless Congress levels the playing field for banks and credit unions, military families living and working on military bases won’t. As we represent the banks that operate on military installations today, as well as the many banks across the nation that want to expand their support for military families, we hope that this Congress will join the many others that have put military financial health and access above all other considerations. We are confident that if it does, it will agree with military families and The Military Coalition, and support this important legislative change which will give our men and women in uniform even more options to choose from when it comes to financial services.
Rob Nichols is president and CEO of the American Bankers Association. Steve Lepper is a retired Air Force major general and is president and CEO of the Association of Military Banks of America. Rebeca Romero Rainey is president and CEO of the Independent Community Bankers of America.