ICBA cries foul as Navy Federal begins running ‘community bank’ on military bases
Navy Federal was awarded Defense Department contract last year
Independent Community Bankers of America, the association representing the nation’s community banks, is asking federal regulators to order Navy Federal Credit Union to stop calling the financial institutions it is operating on military bases abroad “community banks.”
“The Federal Deposit Insurance Corp. and National Credit Union Administration should immediately issue cease-and-desist orders directing the $168 billion-asset institution not to refer to itself as a bank,” ICBA President/CEO Rebeca Romero Rainey said Tuesday.
Romero Rainey said cease-and-desist orders would be in line with NCUA guidance that states that federal law does not explicitly permit insured credit unions to refer to themselves as banks. “Although credit unions may like to present themselves as banks, federal agencies should ward off any attempts to conflate a bank with a credit union, which would likely result in confusion among servicemembers,” she added. She said it is unclear whether the overseas institutions will be examined by the NCUA.
A credit union administering the Military Banking Program does not easily fit under current law. ICBA’s objection is just one of many issues that banking regulators have faced after Navy Federal won the contract to operate 60 military banking facilities and 272 ATMs as part of the Defense Department’s Overseas Military Banking Program.
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