Navy Federal lands DOD contract to run branches, ATMs at overseas military bases

Navy Federal lands DOD contract to run branches, ATMs at overseas military bases (Courtesy of the Jacksonville Business Journal) — For the last four decades, Bank of America Corp. (NYSE: BAC) has been the sole provider of banking services on U.S. military bases overseas. Starting next April, a new financial institution will take over. 

Navy Federal Credit Union, which already serves millions of service members and their families here in the U.S. and abroad, has been awarded the contract from the Department of Defense to operate some 60 branches and 275 ATMs on bases in Europe and the Pacific for the next 10 years.

Vienna-based Navy Federal, the world’s largest credit union with about $165 billion in assets, announced the award Monday. 

It won the contract after BofA, which held it for the past 40 years, opted not to bid on it when the Defense Department put it up for renewal last year. The nation’s second-largest bank did not say why it declined to submit a bid but said in a statement that the decision “in no way impacts” its commitment to service members. 

“We continue to invest in resources and programs to reach even more of the 22 million individuals who have served in the U.S. military,” the company said in an emailed statement. “We also maintain nearly 100 financial centers near U.S. military installations, whose staff is skilled on meeting the needs of our military clients during every stage of their lives.”

Navy Federal is already familiar to many members of the military and their families. It has more than 13 million members globally through its more than 350 branches. Though it once was only to members of the Navy and the Marines, it has in recent years broadened its reach to include all retired and active duty personnel across the military. 

“Supporting active-duty personnel and their families, wherever they are stationed, is at the core of Navy Federal’s mission,” Mary McDuffie, Navy Federal’s president and CEO, said in a statement. “We appreciate the trust the Department of Defense has placed in Navy Federal’s ability to fulfill this mission.”

Navy Federal did not disclose the size of the contract, which will begin with a one-year transition period, followed by a base year and then eight additional one-year options. The branches will continue to operate under the name The Community Bank, but this time as a division of Navy Federal Credit Union, not Bank of America. 

The overseas military banking program was established after World War II to provide active duty service members and on-base commands with retail financial and cash services.