§ 231a.5 - General operating policies and procedures.

(a) General. Given their role in promoting morale and welfare, credit unions operating on DoD installations shall be recognized and assisted by DoD Components at all levels. These credit unions shall provide services to DoD personnel of all ranks and grades within their respective fields of membership.

(b) Limitation on service. (1) Only one credit union shall establish a branch or facility on a DoD installation, and its field of membership normally shall include all assigned DoD personnel. On installations where more than one credit union already exists, each is entitled to the benefits defined in this part.

(2) Except as authorized in section G., appendix to this part, commanders of installations served by on-base credit unions shall ensure that installation activities do not disseminate literature from competing credit unions.

(c) Establishing domestic credit union service. (1) A demonstrated need for credit union services may be addressed by establishing a new full-service credit union or by opening a branch office or facility of an existing credit union under the common bond principle.

(2) Each DoD Component shall develop internal instructions, consistent with the following, that govern the submission and justification of requests to establish credit unions on respective installations:

(i) DoD personnel seeking to establish a new full-service credit union or a branch or facility of an existing credit union shall submit a proposal to the installation commander. Such proposals shall be forwarded through channels to the DoD Component headquarters concerned, together with recommendations for acceptance or rejection.

(ii) The DoD Component shall notify credit unions that operate on DoD installations of the need for service; review the specific proposals of interested credit unions; coordinate with its field commands as appropriate; and recommend for approval the designation of a credit union to the appropriate regulatory agency, providing an information copy to the DC(MS). No specific NCUA approval is required for a Federal credit union to open a branch office.

(iii) No commitment may be made to a credit union regarding its proposal until the appropriate regulatory agency has announced a selection.

(d) Establishing overseas credit union service. (1) When the installation (community) commander determines that credit union services are needed at a location within an existing geographic franchise (see subsection H.2., appendix to this part), and the DoD Component headquarters concurs, the commander shall contact the servicing Defense credit union and request that a branch or facility be established. The basic decision concerning such extensions of service rests with the servicing credit union. If a field of membership has not previously been granted by NCUA to encompass a DoD designated geographic franchise, the DoD Component shall canvass federally-chartered Defense credit unions for proposals to service the solicited region.

(2) In addition to the requirements stated in paragraph (c)(2) of this section, installation commanders shall provide the following information in support of requests to their DoD Component headquarters for overseas credit union service:

(i) In countries not presently served, a statement concurred in by the Unified Commander that the requirement has been coordinated with the U.S. Chief of Diplomatic Mission or U.S. Embassy and that the host country will permit the operation, with any conditions imposed by the host country identified.

(ii) The name and location of the nearest credit union branch or facility.

(iii) The distance between the installation and the nearest credit union branch or facility and the availability of any official or public transportation.

(iv) The number of DoD personnel in duty assignments that confine them to the installation, or who cannot obtain transportation (such as hospital patients).

(3) In reviewing proposals received from Federal Defense credit unions under paragraph (c)(2) of this section, the DoD Component shall give preference to proposals for full-service credit union operations. After coordination with the DC(MS), the DoD Component shall recommend designation of the selected credit union to the NCUA.

(4) A proposed amendment to the federally-chartered credit union's charter must be submitted to the NCUA for approval of service to new groups or geographic areas. Recommendations to the NCUA shall include identification of the primary installation from which the proposed branch would operate and the geographical territory in which any additional branches, facilities, or mobile outlets would operate.

(5) No commitment may be made to a credit union regarding its proposal until the NCUA announces its selection. The DoD Component then shall notify the DC(MS) of NCUA approval and arrange for operations to begin.

(e) Operating agreements. An operating agreement, conforming to the guidelines set forth herein, shall be executed and maintained between each installation (community) commander and the on-base credit union.

(1) Each agreement shall be confined to basic relationships and mutual support activities and may not involve internal operations of the credit union. The installation commander shall agree to provide support as specified in this part. A sample format is contained in DoD 4000.19-R.5

(2) Each credit union operating on a DoD installation shall agree to:

(i) Comply with this part, DoD Directive 1000.11, and DoD Component regulations that implement these issuances.

(ii) Keep the installation commander advised of credit union operations.

(iii) Give the installation commander a copy of its monthly financial report and other local credit union publications.

(iv) Invite command representatives to attend its annual meetings and other appropriate functions.

(v) Indemnify and hold harmless the U.S. Government from (and against) any loss, expense, claim, or demand to which the Government may be subjected as a result of death, loss, destruction, or damage in conjunction with the use and occupancy of premises of the DoD Component in any way caused by agents or employees of the credit union.

(vi) Maintain physical security of cash and negotiable items in a manner consistent with the requirements of the credit union's fidelity insurer. A copy of these requirements shall be provided to the installation commander upon request.

(vii) Accommodate, whenever possible, local command requests for lecturers and printed materials for consumer credit education programs. Credit union personnel invited to participate in such programs shall not use the occasion to promote the exclusive services of a particular financial institution.

(viii) Provide that neither the DoD Component concerned nor its representatives shall be responsible for the financial operation of a credit union or for any expense, loss (including criminal losses), or claim for damages arising from credit union operations.

(ix) Operate in accordance with the guidelines at appendix to this part and comply with other provisions of this part, with DoD Directive 1000.11, and with their DoD Component implementing documents.

(f) Liaison officers. To maintain effective lines of communication, each commander of an installation with an on-base credit union shall appoint a credit union liaison officer as defined in enclosure 2 of DoD Directive 1000.11.

(1) The credit union liaison officer's name and duty telephone number shall be displayed in the lobby of each on-base credit union location.

(2) The liaison officer shall maintain regular contact with the credit union manager to confer, help resolve member complaints, and discuss quantitative and qualitative improvements in the services provided. However, neither liaison officers nor their superiors shall become involved in the internal operations of the credit union.

(3) No one on the board of directors serving the credit union in another official capacity may serve as the credit union or bank liaison officer.

(g) Complaints processing—(1) Discrimination. Any installation commander who suspects or receives complaints of discrimination by the on-base credit union shall try to resolve any such problem by negotiation. The installation commander should consider using the credit union's supervisory committee in resolving the complaint. Failing resolution, and in accordance with DoD Component implementing regulations, a written request for investigation shall be forwarded to the appropriate regulatory agency. The request must document the problem and local command efforts toward resolution. Information copies of all related correspondence shall be sent through channels to the DoD Component concerned for transmittal to the DC(MS).

(2) Malpractice. The installation commander shall report to the appropriate regulatory agency any evidence suggesting malpractice by credit union personnel, in accordance with DoD Component regulations.

(3) Followup. A DoD Component unsatisfied with action taken by the appropriate regulatory agency shall submit a full report with recommendations to the DC(MS). The DC(MS) shall pursue the matter with the appropriate regulatory agency and apprise the respective DoD Component of progress or resolution.

(h) Logistic support—(1) Membership criterion. (i) In accordance with section 124 of the Federal Credit Union Act, the provision of no-cost office space and other real property is limited to credit unions having a membership at least 95 percent of which is composed of individuals who are, or who were at the time of admission into the credit union, military personnel or Federal employees, retired military personnel in the credit union's field of membership, or members of their families. This percentage criterion applies to the total credit union membership, not just to members who use the on-base office.

(ii) Before renewal of each no-cost lease or license, the credit union shall provide a written certification, prepared on credit union letterhead and signed either by its president or general manager, that the credit union continues to meet the 95 percent criterion. A certification also is required whenever there is a merger, takeover, or significant change in a field of membership. This certification shall serve as justification and documentation for the continued allocation of free Government office space and other real property.

(2) Criteria for use of space in Government-owned buildings. (i) A credit union may be provided space on a DoD installation at one or more locations by no-cost permits or licenses for periods not to exceed 5 years. The cumulative total of space authorized at one or more locations is subject to the limitations contained in MIL-HDBK-1190.

(ii) A credit union that fails to meet the 95 percent criterion shall be charged fair market rent for space provided. No credit union whose field of membership excludes any DoD personnel assigned on the installation shall receive free Government space. This latter limitation is waived in cases when an installation is served by more than one credit union.

(iii) All space assigned by the GSA, whether leased or in Federal office buildings, is reimbursable to the GSA at the current GSA rental rates under Pub. L. 92-313. Consequently, the GSA shall charge the benefiting DoD Component for any space assigned for credit union operations. Such space is then subject to the provisions of paragraphs (h)(i) and (ii) of this section.

(iv) When a credit union that meets the 95 percent criterion uses its own funds to expand, modify, or renovate Government-owned space, it may be provided a no-cost permit or license for a period not to exceed 25 years. Duration of the permit or license shall be commensurate with the extent of the improvements as determined by the DoD Component concerned. It shall be effective until the agreed date of expiration or until the credit union ceases to satisfy the 95 percent criterion. ln this latter case, the no-cost permit shall be cancelled in favor of a lease immediately negotiated at fair market value under the provisions of paragraph (h)(2)(ii) of this section. If the credit union desires, this lease at fair market value may extend through the period identified in the original license, or 5 years, whichever is greater.

(v) Similarly, a credit union not meeting the 95 percent criterion that uses its own funds to expand, modify, or renovate Government-owned space, may be provided a lease at the fair market value for a period not to exceed 25 years. Duration of this lease shall be commensurate with the extent of the improvements as determined by the DoD Component concerned.

(3) Utilities, base services, and equipment.(i) When available, janitorial services, utilities (such as air-conditioning, heat, and light), fixtures, and maintenance shall be furnished at no cost to a credit union occupying free space in a Government building. The credit union shall pay for other services, such as telephone lines, long-distance toll calls, and space alterations. Should a credit union fail to meet the 95 percent membership criterion, any logistic support furnished shall be on a reimbursable basis.

(ii) When available from local stock, typewriters, adding machines, other office equipment, and office furniture may be leased to an on-base credit union at nominal cost; i.e., $1.00 per year, under authority of 10 U.S.C. 2667.

(iii) Central locator service shall be provided under conditions identified in enclosure 3 of DoD Directive 1000.11 when requested by Defense credit unions. This service shall be provided at no cost, in accordance with DoD Instruction 7230.7 6 (32 CFR part 288).

(iv) DoD Components shall provide debt processing assistance to Defense credit unions, in accordance with DoD Directive 1344.9 7 (32 CFR part 43a), as limited by the Privacy Act Guidelines set forth in enclosure 3 of DoD Directive 1000.11. Unless otherwise prohibited, Defense credit unions seeking restitution for delinquent loans or dishonored checks may request the assistance of local commanders, credit union liaison officers, or other officials.

(v) DoD Components shall prescribe clearance procedures for departing military personnel that provide the on-base credit union with adequate notice of such membership changes. Clearance involves reporting a change of address, reaffirming allotments or notes payable, and arranging for counseling, if appropriate. Clearance shall not be denied to facilitate the collection of debts or the resolution of disputes between the credit union and its departing members. Where administratively feasible, similar clearance procedures shall be used for departing DoD civilian employees.

(4) Additional support in overseas areas. In addition to the logistic support identified in paragraphs (h)(1) through (3) of this section, the following may be made available to Defense credit unions operating at overseas installations:

(i) Military postal service may be authorized, in accordance with DoD Directive 4525.68. For full service credit unions, as defined in DoD Directive 1000.11, use of the free intra-theater delivery system (IDS) is authorized for all routine mail sent and received between Army Post Offices (APOs) and Fleet Post Offices (FPOs) within a theater. To qualify, the credit union must certify to the appropriate postal official that all its full-time overseas offices provide “full service” or equivalence to full service, i.e., the availability of cash through ATMs at non-full service locations.

(ii) Access to DoD voice and data telecommunication systems as granted by the Defense Communication Agency on a case-by-case reimbursable basis.

(iii) Travel of U.S.-based credit union officials to their overseas offices shall be as set forth in DoD Directive 4000.6 9 Invitational travel orders that authorize travel at no expense to the U.S. Government may be issued by the local commander for official onsite visits.

(iv) For full service credit unions, as defined in DoD Directive 1000.11, logistical support shall include steel bars, grillwork, security doors, a vault or safe (or both), burglar alarm system, other security features normally used by credit unions, construction of teller cages, and other necessary modifications and alterations to existing buildings to facilitate cash operations, subject to the procedures and fiscal limits in DoD Directive 4270.24 10.

(i) Construction of credit union buildings. (1) Credit union proposals to finance construction of buildings on domestic DoD installations at their own expense must be processed in accordance with DoD Instruction 7700.18 11. In support of each construction proposal, the credit union shall provide written assurance that:

(i) Management understands its potential loss of the building in the event of installation closure or other delimiting condition specified in paragraph (j)(1)(i) of this section;

(ii) The proposed building shall serve only the needs of the credit union and shall not be used to house other activities;.

(iii) Management accepts financial responsibility and shall reimburse the U.S. Government for all costs of construction and any maintenance, utilities, and other services furnished. Rates shall be established in accordance with DoD Instruction 7230.7 and confirmed by a written agreement between the DoD installation and the credit union.

(2) Credit unions that finance building construction at their own expense do not have to meet the space criteria contained in MIL-HDBK-1190.

(j) Leases of Government land. (1) Except as provided in paragraphs (h)(2) (iv) and (v) of this section, land required for approved building construction at credit union expense shall be made available by real estate lease at minimal charge; e.g., $1.00 per year.

(i) Leases shall include the provision that, in the event of national emergency or any other event cited in paragraph (l)(3) of this section, and at the option of the Government, structures and other improvements erected thereon shall be conveyed to the Government without reimbursement or removed and the land restored to its original condition.

(ii) Once determined, the rental charge under any lease granted at fair market rental is applicable for the term of the lease. However, an extension of any such existing lease may provide for nominal rental, e.g., $1.00 for the term of the lease extension.

(2) When a credit union participates in the construction of a complex, such as an installation shopping mall, it shall be provided a lease at nominal rental covering only underlying land for the specific space to be occupied by the credit union.

(3) If determined, in accordance with 10 U.S.C. 2667, to be in the Government's interest, an existing lease of land may be extended before to expiration of its term. Passage of title to facilities shall be deferred until all extensions have expired. Such extensions shall be for periods not to exceed 5 years. The credit union shall continue to maintain the premises and pay for utilities and services furnished in accordance with DoD Instruction 7230.7.

(4) When, under the terms of a lease or extension, title to improvements passes to the Government, the credit union shall be given first choice to continue occupying those improvements under a facility lease.

(i) The lease shall require the credit union to maintain the premises and pay for utilities and services furnished in accordance with DoD Instruction 7230.7.

(ii) In addition, the lease for a credit union not qualifying under the 95 percent criterion cited in paragraph (h)(1) of this section, shall require that the credit union pay fair market rental for land underlying the improvements.

(k) Automated teller machine (ATM) service. (1) ATMs may be used to augment service provided by an on-base credit union.

(2) An on-base credit union that proposes to augment its service by installing one or more ATMs shall:

(i) Coordinate the ATM proposal through the installation commander under provisions of applicable DoD Component regulations.

(ii) Provide a statement that the cost of ATM installation and maintenance shall be borne by the credit union alone or in conjunction with other financial institutions.

(iii) Provide for access through debit and credit cards.

(3) Before service begins, regulatory agency approval, as necessary, must be obtained, and leases must be negotiated in accordance with this part.

(i) No lease is needed to site an ATM within an existing credit union office.

(ii) When a credit union requests up to 100 square feet of additional floor space in an existing structure and the credit union agrees to bear all expenses for modifying the structure, a lease providing for nominal rental, i.e., $1.00 for the term of the lease, shall be locally negotiated and approved. This lease provision also shall be offered if a credit union requests up to 250 square feet of land to construct, at its expense, a kiosk or other structure to house an ATM. In either case, the charge for any maintenance, utilities, and services shall be consistent with that applied to the on-base credit union office.

(iii) Leases pertaining to other situations shall be negotiated in accordance with paragraphs (h)(2) and (j) of this section.

(l) Termination of credit union service—(1) Termination of operations by the credit union. An on-base credit union planning to terminate its operations should notify the installation commander at least 90 days before the closing date. This notification should precede public announcement of the planned closure. When appropriate, the commander shall attempt to negotiate an agreement permitting the credit union to continue operations until the installation has made other arrangements. Immediately upon notification of a closing, the commander shall advise the DoD Component headquarters concerned. lf it is determined that continuation of credit union services is justified, action to establish another credit union shall comply with paragraph (c) or (d) of this section.

(2) Termination for cause. Installation commanders should ensure that on-base credit unions are providing services in the best interest of DoD personnel. If, after discussion with credit union officials, the installation commander determines that the operating policies of the credit union are inconsistent with this part, a recommendation for termination of logistic support and space arrangements may be made through DoD Component channels. A credit union shall be removed from the installation only with approval by the DoD Component headquarters, after coordination with the DC(MS) and the appropriate regulatory agency.

(3) Termination in interest of national defense. At the option of the Government, leases may be terminated in the event of national emergency or as a result of installation inactivation, closing, or other disposal action.