Last week, the Navy Federal Credit Union announced that it has begun operating military banking facilities in 60 locations in Europe and the Pacific as part of its previously announced agreement with the Department of Defense.
The locations, however, are part of a wholly separate entity from Navy Federal itself and will operate under the brand “Community Bank, operated by Navy Federal Credit Union.”
In response to the announcement, the Independent Community Bankers of America (ICBA) called upon the National Credit Union Administration to immediately issue a cease-and-desist order directing Navy FCU “not to refer to itself as a bank.”
In addition, the NCUA has ruled that accounts at a “community bank” are not credit union accounts, and are therefore not eligible for deposit insurance. The deposits are privately insured by the property and casualty insurance company “Excess Share Insurance.”
“The brazen attempt to steal the good name of community banks demonstrates the insecurity of credit unions and their overpaid executives,” said IBAT President and CEO Christopher Williston. “Credit unions want to be banks in every way, except when it comes to paying taxes because they recognize that true community banks have a reputation in the marketplace that credit union executives only wish they could replicate.”
