[Code of Federal Regulations] [Title 32, Volume 2, Parts 191 to 399] [Revised as of July 1, 1998] From the U.S. Government Printing Office via GPO Access [CITE: 32CFR231.4] [Page 421-423] TITLE 32--NATIONAL DEFENSE (CONTINUED) PART 231--FINANCIAL INSTITUTIONS ON DOD INSTALLATIONS--Table of Contents Sec. 231.4 Policy. (a) Duly chartered financial institutions may be authorized to provide services, where demonstrated and justified needs exist, to facilitate the administration of public and quasi-public monies and enhance the morale and welfare of DoD personnel. (b) Financial institutions shall be established on DoD installations only after approval by the appropriate regulatory agency and the DoD Component concerned. (1) Independent or branch banks, full-service credit unions, and savings associations are the preferred sources of on-base service at domestic installations. (2) Banking facilities shall be established on DoD installations only when [[Page 422]] a demonstrated and justified need cannot be met through other means. Normally, banking facilities shall be used only at overseas locations and in States that prohibit branch banking. In times of mobilization, it may become necessary to designate additional banking facilities as an emergency measure. Upon recommendation by a DoD Component, banking facilities are designated by the Treasury Department under 12 U.S.C. 265. (3) The extension of banking facility and credit union services overseas is encouraged, consistent with the policies stated herein and with pertinent status of forces agreements, bilateral arrangements, and local laws. (4) Retail banking operations shall not be performed by DoD activities. DoD Components shall rely on commercially available sources in accordance with DoD Directive 4100.15\4\ (32 CFR part 169). However, proposals to seek the provision of financial services by institutions off the installation, when such services are available from existing on- base institutions, shall be approved by the DoD Component headquarters only after consultation with the Comptroller, Department of Defense (C, DoD). --------------------------------------------------------------------------- \4\ See footnote 1 to Sec. 231.1. --------------------------------------------------------------------------- (c) Financial institutions authorized to locate on DoD installations shall be provided logistic support as set forth in DoD Instructions 1000.10 and 1000.12. (d) Military disbursing offices, nonappropriated fund instrumentalities, and other DoD installation activities shall use on- base financial institutions to the maximum extent feasible and consistent with sound management practice. (e) DoD personnel who tender uncollectible checks, overdraw their accounts, or fail to meet their financial obligations in a proper and timely manner damage their credit reputation and affect the public image of all DoD personnel. Furthermore, losses sustained by financial institutions on DoD installations as a result of these actions increase operating costs and may reduce the institutions' viability. Such added operating costs must be borne by other customers and, in some cases, may increase the cost to the Government of providing on-base financial services. Military financial counselors or legal advisors shall recommend workable repayment plans that avoid further endangering credit ratings and careers of affected personnel. Counselors shall ensure that such personnel are aware of the stigma associated with bankruptcy and shall recommend its use only as a last resort, when no other alternative will alleviate the situation. (f) It is DoD policy to support the delivery of retail financial services on DoD installations via automated teller machines (ATMs) that have connectivity to national networks; e.g., the Armed Forces Financial Network. (1) Each on-base financial institution is encouraged to offer ATM service with network connectivity. Proposals to install ATMs from on- base financial institutions shall be considered under provisions stated in DoD Instructions 1000.10 and 1000.12. (2) Proposals to install ATMs from other than on-base financial institutions may be considered under the following circumstances: (i) If the proposal offers ATM service with network connectivity, the installation commander shall determine whether the existing ATM(s) on the installation has network connectivity. (ii) If the existing ATM(s) provides network connectivity, no further action is appropriate. If the existing ATM(s) does not provide network connectivity, the on-base financial institution shall be given up to 6 months to provide such connectivity. (iii) If ATM service is unavailable or if existing on-base ATM service does not provide network connectivity within the 6-month period, the installation commander may seek ATM service with network connectivity from another financial institution. Lease of space for ATM installation would be under terms as stated in DoD Instructions 1000.10 and 1000.12. (g) The termination of operations by an on-base financial institution shall be initiated by a DoD Component only under one of the following conditions: (1) The mission of the installation has changed, or is scheduled to be [[Page 423]] changed, thereby eliminating or substantially reducing the requirement for financial services. (2) Active military operations prevent continuation of on-base financial services. (3) The performance of the financial institution in providing services is not satisfactory according to standards ordinarily associated with the financial services industry or is inconsistent with the procedures prescribed in DoD Instructions 1000.10 and 1000.12. Termination actions begun on the basis of inadequate performance shall be substantiated by sufficient evidence. Such actions shall be coordinated with the appropriate regulatory agency and the Comptroller of the Department of Defense before being carried out.