We all know the sacrifices made each and every day by our men and women in uniform to defend our freedom. Shouldn’t we, in turn, ensure their freedom to select the best financial services to fit their needs? That can only happen if we allow our service members greater access to regulated on-base banking services than they currently receive.
The appalling proliferation of payday lenders and auto loan sharks just outside bases demonstrates why it’s critical that regulated banks and credit unions serve our troops. The government should help facilitate banking access for service members, and it does so in part by offering free rent to credit unions. However, this incentive should extend to all regulated financial institutions if people in our armed forces are to be protected against unscrupulous lenders.
Regulated community banks comprise 75 percent of banks operating on military installations, but their numbers are falling rapidly, partly because of their competitive disadvantage. Since 2004, the number of military installations with bank branches has plummeted to 74 from 129, a 43 percent decline.
Credit unions do not need additional protection from regulated competitors at U.S. military installations. Navy Federal Credit Union recently surpassed $100 billion in assets and PenFed has grown to $25 billion in assets by expanding their membership requirements so far beyond military members to render them meaningless.
Banks, including small community military banks with decades of history of service, pay full freight for rent at those same facilities, as well as taxes. Their disappearance from bases is a disservice to the people in our armed forces. When service members fall prey to payday lender schemes, they can fall into financial trouble and get discharged.
A better way to serve our military members is to provide them with more and better options. The Military Coalition, which represents 34 different groups such as the VFW and Wounded Warriors that advocate on behalf of both veterans and active-duty military members, has urged Congress to support greater choice as it considers the National Defense Reauthorzation Act. There is no stronger endorsement our service members could ask for.
The Senate and House should resist the lobbying effort by credit unions to limit financial freedom for American service members and their families by adopting Sec. 2821 of the National Defense Reauthorization Act.