Defense credit unions equipped with training, experience to meet servicemembers’ unique needs

The country’s 180 defense credit unions specialize in providing services worldwide to more than 40 million members, America’s Credit Unions President/CEO Jim Nussle wrote to Secretary of Defense Pete Hesgeth and Sen. Elizabeth Warren, D-Mass., Thursday. Warren wrote to Hegseth this week calling for a freeze on calling for a freeze on contracts between the Department of Defense and all banks and credit unions operating on military bases until perceived issues with overdraft practices are addressed.

Credit unions have provided financial services on U.S. military bases since 1928, on overseas military installations since 1967, and this commitment was affirmed with a 2006 amendment to the Federal Credit Union Act providing the Department of Defense (DoD) discretionary authority to provide facilities at nominal costs to credit unions that meet certain requirements.

Nussle emphasized the continued need for access to financial services for military members.

“If mission-focused institutions were forced off base, many Marines and Soldiers would have little option but to patronize payday and pawn lenders that routinely charge effective annual percentage rates exceeding 300%,” Nussle wrote. “By contrast, credit union overdraft programs operate inside a federally insured framework with opt-in enrollment, real-time balance alerts, daily fee caps, mandatory repayment windows, and one-on-one counseling that breaks cycles of repeat use.”

His letter to Hegseth recommends: 

• Maintaining credit union access to on-base facilities so servicemembers can continue to receive transparent, reasonably priced financial services tailored to military life;
• Standardizing disclosures and embedding financial literacy briefings into initial entry training, rather than banning or arbitrarily limiting products that members value; and
• Convening a DoD–credit union working group to exchange best practices on consumer safeguards and educational outreach.

Nussle also wrote to Warren Thursday highlighting the significant bond between credit unions and servicemembers, so much so that defense credit unions are equipped with the training and experience to address the unique financial challenges that face servicemembers every day.

“America’s Credit Unions and our defense credit union members believe it is important to maintain the current structure to ensure credit union access to on-base facilities without interruption so that servicemembers can continue to receive transparent, reasonably priced financial services tailored to military life,” he wrote. “We also look forward to continuing to work with the Department of Defense to address any concerns it may have to improve services to the men and women on base, such as improving disclosures and financial literacy training and promoting best practices for consumer protection, rather than banning or arbitrarily limiting products that members want and value.”