NFCU executives tout the benefits for its customers
June 2, 2008
Navy Federal Credit Union President and CEO Cutler Dawson and Executive Vice President of Branch Operations Lee Gound visited Yokosuka Naval Base on Friday and fielded questions about the organization’s practices and plans.
Why doesn’t Navy Federal Credit Union offer foreign currency exchanges?
Dawson: The Department of Defense allows one bank and one credit union to operate on each base. The DOD subsidizes the on-base banks to provide foreign currency exchange service for the base community; credit unions are not subsidized. We would have to charge more to break even, and that wouldn’t work for anyone.
A recent Bloomberg report showed home foreclosure rates were four times the national average in 10 communities. Do you operate in those communities and what is your foreclosure rate?
Dawson: I saw the article and the communities mentioned did not match up with our areas. Our foreclosure rate is one-fifteenth of the national average. We are not seeing what they reported but 1) we do not engage in sub-prime lending 2) we make mortgages to someone for the right house under the right circumstances and 3) we never sell mortgages to another party. It’s Navy Federal from start to finish.
Are active-duty military more of a target for sub-prime loans?
Dawson: I think everyone is a target, including active-duty military. We’ve all been bombarded with the advertisements promising cheap mortgages, now people are starting to question them. And while other mortgages are falling, we’ve actually seen mortgage volumes increase. I think that’s because people are returning to trust — and they know they can trust us.
How does the recent request for the Pentagon to review the Army and Air Force Exchange Service’s new Military Star credit card affect your business?
Gound: The complaint claims that the AFFES/JP Chase Morgan card violates DOD policies by marketing an off-base financial institution when on-base businesses are present, and conflicts with the rule that only allows one bank and one credit union to operate per military base.
Dawson: We are aware of the issue and NFCU is a member of the National Association of Federal Credit Unions that pointed out the problem. We believe it is a conflict. We also know that we offer a better credit card than they do. We care more about our people than this third party that AAFES will use. We are confident [the Pentagon] will reach the right conclusion.
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