Wednesday, July 1, 2015

VAntage Trust FCU Did Not Pay Rent to U.S. Government for Branches

A story appearing in the about the Veterans Administration (VA) targeting two branches of VAntage Trust Federal Credit Union for closure noted that the credit union branches have operated rent-free for years.

The article pointed out that the credit union has not paid rent for 62 years at the branch located at the Plains Township VA Medical Center and also has occupied Mundy Street rent-free since opening the branch 17 years ago.

Section 1770 of the Federal Credit Union Act allows for the allotment of space in federal buildings or federal lands rent free to a credit union, if at least 95 percent of the membership of the credit union to be served by the allotment of space or the facility built on the lease land is composed of persons who either are presently Federal employees or were Federal employees at the time of admission into the credit union, and members of their families, and if space is available.

However, there is no policy rationale for providing credit unions with free rent in federal buildings.

Credit unions are private organizations and as private entities, credit unions should be required to pay fair market rents on branches housed in federal buildings and on federal lands.

Taxpayers should no longer be asked to subsidize rent-free credit union branches in federal facilities.

It is time for Congress to repeal Section 1770 of the Federal Credit Union Act.

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