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Presented by: Service Banking Officers

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Title: Presented by: Service Banking Officers


1
Presented byService Banking Officers
Banking Liaison Officer Training Session
2
Agenda
  • Introductions
  • Overview
  • History of Banks and Credit Unions
  • Banking Liaison Officer (BLO) Resources
  • Installation Roles and Responsibilities
  • Domestic Financial Institution (FI) Establishment
  • Domestic FI Solicitation
  • FI Termination
  • ATM Solicitation
  • Treasury General Account (TGA)
  • Operating Agreements
  • Morale, Welfare, and Recreation Sponsorships
  • Leases
  • In-Kind Consideration
  • Financial Education
  • Overseas

3
Services Banking Liaison Officers (BLOs)
Army Banking Liaison
Officer (703) 693-2698
Air
Force Banking Liaison Officer (301)
981-7785 Banking Liaison Manager (301)
981-7767 Navy Banking Liaison Officer (202)
685-6738 Banking Liaison Manager (202)
685-6752 Marines Banking Liaison Officer
(703) 614-2595
4
DoD Financial Institution Overview
Office of the Under Secretary of Defense
(Comptroller) (OUSD(C)) Provide policy guidance
Military Service BLOs/CULOs
DoD Banking and Credit Union Office Columbus, Ohio
Installation BLOs/CULOs
Installation FIs
Overseas Credit Unions
5
History of DoD Banks and Credit Unions
  • Banks
  • Country began mobilizing in 1941
  • Disbursing officers needed cash for payrolls
  • First stateside military banking facility
    commenced in 1942
  • at Ft. Sill, Oklahoma
  • Overseas military banking facilities commenced
    in 1947
  • Credit Unions
  • The first state credit union act passed in 1909
  • Owned and controlled by its members
  • Serve groups that share something in common
  • Credit unions are not for profit
  • Serving and supporting DoD since 1928
  • First overseas defense credit union opened in
  • December 1967

6
History of Overseas Banking and Credit Union
Programs
  • Transferred to DFAS from OUSD(C) DoD Reform
    Initiative Directive 7
  • 1 January 1998 Overseas Military Banking
    Program (OMBP)
  • OUSD(C) transferred responsibility for the
    oversight, control, and management of the
    day-to-day operations to DFAS
  • 13 July 1998 Domestic Bank Credit Union
    Programs
  • OUSD(C) transferred responsibility for the
    programs and procedures governing banks and
    credit union on DoD Installations.
  • OUSD(C) retained policy oversight for DoDI
    1000.11
  • September 2000 Volume 5, Chapter 34,
    Procedures Governing Banks, Credit Unions and
    Other Financial Institutions on DoD Installations

7
Banking Liaison Officer (BLO) Resources
  • Banking Liaison Officer Policy, Procedures, and
    Desk Guide
  • DOD Instruction 1000.11 Financial Institutions
    on DoD Installations
  • DoD FMR, Volume 5, Chapter 34 Procedures
    Governing Banks, Credit Unions and other
    Financial Institutions on DoD Installations
  • http//www.defenselink.mil/comptroller/fmr/05/05_3
    4.pdf
  • Commander Installation Banking and Credit Union
    Liaison Officer Desk Guide
  • http//www.dfas.mil/more/referencelibrary/bankingl
    iaisonofficerguide.html
  • DoD Instruction 1344.07 - Personal Commercial
    Solicitation on DoD Installations
  • DoD Instruction 1342.27 - Personal Financial
    Management for Service Members

8
Examples and/or Questions
  • Question What information does the BLO Guide
    provide that the DODFMR
  • Volume 5, Chapter, 34 or DoDI
    1000.11 does not?
  • Answer
  • Morale, Welfare, Recreation Event Sponsorship
    Challenges
  • Sample Banking Liaison Officer/Credit Union
    Liaison Office Appointment
  • Information on In-Kind Consideration
  • Information to establish or change a TGA
  • Various policy memorandums from OUSD(C)
  • DoD Designated Foreign Geographic Franchise
    Assignment Listing
  • Information about the Overseas Military Banking
    Program Contract

9
Installation Roles and Responsibilities
  • BLO
  • Vital link between the Commander and the FI, and
    assists in resolving complaints
  • Monitors on-base financial services
  • Keeps FIs informed of pending developments
    impacting services e.g., deployments
  • Ensures lease and operating agreements are
    current
  • Works with Personal Financial Managers to educate
    them on the financial educational resources
    provided by the on-base FIs
  • Installation Commander
  • Assign BLO
  • Ensure suitable financial services
  • One bank/credit union per installation must seek
    financial services from only on-base
    FIs
  • Provide office space and logistical support IAW
    regulations
  • Invite FIs to participate in newcomer briefings
    and financial education seminars
  • Financial Institution Manager
  • Comply with applicable laws, regulations,
    policies, and procedures
  • Maintain liaison with Installation Commander,
    base leadership, and BLO
  • Ensure adequate staffing
  • Coordinate leasing/operating agreements with BLO

10
Domestic Financial Institution (FI) Establishment
  • Establishment
  • Installation Commanders will request banking
    services IAW regulation.
  • DoD FMR, Volume 5, Chapter 34
  • paragraphs 340502 and 340702
  • DoD Instruction 1000.11
  • Services will review, solicit for, and approve
    banking needs as necessary.
  • Requests for the establishment shall include
    all information listed in
  • paragraph 340502A
  • Number of DoD personnel who are eligible to use
    the FI services
  • Distance and transportation to financial
    institutions in the vicinity
  • Number of DoD personnel confined to the
    installation
  • Name and location of the TGA depository
  • List of organization and nonappropriated fund
    accounts
  • Description and photographs of proposed space

11
Examples and/or Questions
  • Situation The need to establish a financial
    institution aboard a DoD installation
    following the departure of the current on-base
    financial institution.
  • Resolution
  • The Installation Commanding Officer (ICO)
    notified the Deputy Assistant Secretary (DAS).
  • The ICO highlighted a need for financial services
    on the installation. Subsequently, the ICO
    endorsed and forwarded a request for financial
    services to be provided by an outside financial
    institution to the DAS.
  • DAS reviewed the request and granted permission
    to solicit.

12
Domestic Financial Institution Solicitations
  • Solicitations
  • Solicitation performed IAW with DoDFMR, Volume
    5, Chapter 34,
  • paragraph 340503
  • Scope dependent on service (designee) or
    installation commander
  • Solicitation letters sent to local financial
    institutions and published in the local
    newspapers
  • If necessary, solicitations can be expanded to
    a larger geographic area and published on
    Federal Business Opportunities (FedBizOpps) and
    trade journals.
  • Military departments work closely with
    Association of Military Banks of America and the
    Defense Credit Union Council to obtain additional
    services.
  • Operating agreement and lease signed prior to
    operating on the
  • installation

13
Examples and/or Questions
  • Situation Establishment of a financial
    institution aboard a DoD installation
    following departure of current on-base credit
    union

Question What is the normal protocol for
conducting a solicitation?
  • Resolution
  • Solicitation announcement was released by the
    installation.
  • Upon completion of the solicitation, ICO drafted
    an endorsement of recommendation and forwarded it
    to the DAS for approval.
  • DAS reviewed and provided concurrence. Upon
    concurrence, installation and FI were required to
    enter into an operating agreement before
    operations could commence.

14
Terminations
  • May occur due to mission change, performance,
    merger, or violations
  • FIs are required to provide 180 days advance
    notice of intent to close

15
Examples and/or Questions
  • Situation The ICO learned that the current
    on-base financial institution wishes to
  • terminate its operations
    on-base.
  • Questions
  • Can the installation allow the lease to expire
    under its own terms and bring on another credit
    union? What are the terms for termination?
  • What recourse does the Command have?
  • Resolution
  • To grant approval, ICO and/or the Banking Liaison
    Officer must have received written notice from
    the departing FI 180 days in advance to
    advise/assist the ICO in determining
  • AND
  • Ensure the departing FI has met all other
    requirements for termination within DoDFMR Volume
    5, Chapter 34, Paragraph 340703.

16
ATM Solicitation Process
  • On-base FIs have right to first refusal.
  • Solicitation process required if on-base FIs
    decline to perform service or if there are no FIs
    on the installation.
  • Exception to policy required by Service Secretary
    to conduct solicitation for ATM service when FIs
    are on installation.
  • Commander conducts solicitation and forwards
    recommendation to the Service Secretary for final
    approval.

16
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Examples and/or Questions
  • Situation Base wanted to bring ATMs on post to
    support special events
  • Base had a temporary ATM requirement to have
    portable ATMs at an event
  • Base BLO contacted on-base FIs with requirement
  • Outcome
  • FIs declined to provide ATM service but were not
    opposed to an off-base FI providing the service
  • Base requests temporary waiver to the one
    bank/one credit union rule to solicit an off-base
    FI to provide ATMs at the event
  • Temporary approval was granted for the event
    only. Any future use of off-base FIs requires
    a separate approval

17
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Operating Agreement
  • An operating agreement is
  • A document that defines the relationship
    between the FI and installation
  • FIs must have current operating agreement prior
    to commencing operations.
  • Negotiated between the installation commander
    and the FI and reviewed every
  • 5 years
  • A copy of the operating agreement should be
    sent to your respective military
  • department BLO.
  • An operating agreement should include the hours
    of operation, agreement to
  • comply with DoD policies and procedures,
    security requirements for cash
  • shipments, and an agreement to reimburse the
    government for logistical
  • support.
  • Any changes to the operating agreement must be
    approved by the installation
  • commander.

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TGA
  • Commercial banks or other FIs which have been
    designated specifically and authorized by the
    Department of the Treasury to maintain a demand
    account in the name of the Department of the
    Treasury for the purpose of accepting deposits to
    the TGA from disbursing officers.
  • These depositaries are designated only at
    locations where they are needed to receive
    deposits of public funds for credit to the TGA.
  • An Agency Profile Sheet is submitted to formally
    request authorization to deposit funds with a TGA
    or to change from one authorized depositary to
    another.

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Examples and/or Questions
  • Situation The FI on base wants to stop
    providing TGA service. What recourse
  • does the Command have?
  • The FI notified the treasury and base they would
    be closing their TGA.
  • The TGA was a requirement in the operating
    agreement.
  • As a result, the base had to decide to use an
    off-base TGA or terminate the operating agreement
    with the current FI and solicit for a new FI to
    come on base that would have a TGA.
  • Using an off-base TGA would have caused
    additional time and security costs to the base
    organizations.
  • Resolution
  • The FI reconsidered their decision and continued
    to operate the TGA

20
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Morale, Welfare, and Recreation Sponsorship
  • Sponsorship must be consistent with other DoD
    and military department
  • policies (DoD Instruction 1344.07, Personal
    Commercial Solicitation on DoD
  • Installations).
  • Sometimes a challenge misunderstanding and
    unfamiliarity with regulatory
  • guidance
  • Cannot be used to gain access to collect
    information for solicitation
  • Cannot advertise and distribute competitive
    financial services/products
  • literature

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Examples and/or Questions
  • Situation Material distributed by off-base FI
    sponsoring MWR events
  • Base BLO requested guidance on what information
    could be distributed by off-base FI sponsoring
    events
  • Questions
  • Is the 2002 OUSD(C) memorandum on sponsorship
    still valid?
  • What is the purpose of an operating agreement?
  • How often must the operating agreement be
    updated?
  • What prevents off-base FIs from distributing
    competitive information?
  • Why are on-base FIs granted exclusivity?
  • Resolution
  • Off-base FIs cannot distribute competitive
    literature for services listed in the operating
    agreement.
  • Distribution of materials must also comply with
    DoDI 1344.07.

22
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Examples and/or Questions
  • Situation Financial materials distributed by
    MWR sponsor at on-base event
  • Base BLO should work with the on-base FI during,
    at, and before all events where outside FI
    sponsorship is planned.
  • Questions
  • Who reviews the DoDI 1344.07 to ensure products
    presented do not compete with the on-base FI?
  • Who do I coordinate with to correct these issues?
  • Resolution
  • BLO reviewed materials to ensure compliance
  • Discussed the event with the FIs on base to
    ensure they did not have any issues with the
    materials being presented
  • Requested to review the MWR sponsorship agreement
    to ensure limitations and exclusions were
    explained to the FI or vendor

23
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Examples and/or Questions
  • Situation Mobile ATM needed for MWR event MWR
    contracted service with off-base FI
  • Base BLO should clearly review the installation
    request for services
  • Questions
  • How much time does the FI have to respond to a
    request for service?
  • If initially they can not support the request, is
    my job complete?
  • When do I get the service BLO involved?
  • Resolution
  • Once the on-base FI could not fit the request,
    the local BLO contacted the Service BLO for
    exception to policy (MWR already had contract).
  • Base FI Identified they were not given sufficient
    time to respond to the request
  • Reviewed the request completely and noticed the
    request could be filled by the on-base FI and all
    parties were in agreement
  • Prevented the violation and on-base FI supported
    the event successfully

24
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Leases
  • Leases allow the FI to provide service on the
    installation
  • On-base FI must enter a lease prior to
    commencing operations.
  • Terms shall not exceed 5 years except where the
    FI uses its own funds to improve existing
    government facilities (up to 25 years for
    construction).
  • Consideration for lease will be based upon fair
    market value (FMV) exclusive
  • of any improvements made.
  • Credit unions shall be offered no cost leases
    in government facilities if they meet the 95
    percent criterion.
  • Government has right to terminate lease
  • Lease can be paid by cash or in-kind.
  • In-kind consideration (IKC) IAW Title 10,
    U.S.C., Section 2667
  • Military departments differ in their procedures
    and types of consideration.

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In-Kind Consideration
  • Military departments met with the Army Corps of
    Engineers and Naval Facilities
  • Engineering Command to develop standards for
    IKC.
  • Leases are based on FMV appraisal.
  • IKC includes other services such as
    financial services provided by
  • on-base FIs.
  • IKC process generally takes about 1 year and
    therefore must begin early
  • with the involvement of the BLO.

26
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Examples and/or Questions
  • Situation The lease between the FI and the
    installation is a process
  • The BLO should understand the specifics of the
    lease and ensure it is updated, current, and
    valid.
  • Questions
  • What does the lease cover?
  • Are leases between the installation and all FIs
    the same?
  • Does the Staff Judge Advocate (SJA) review the
    lease?
  • Resolution
  • The lease details all the space to occupy,
    logistical support provided by the installation,
    responsibility of the FI, and percent of IKC as a
    discount.
  • Provided information to base personnel on cost
    versus no cost leases
  • SJA did review some leases to ensure all areas
    are addressed and both parties are covered they
    issued a legal opinion.

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Examples and/or Questions
  • Situation In Kind Consideration negotiation
    process
  • Base BLO should work with the on-base FI and
    installation support to ensure this process is
    completed timely, accurately, and fairly.
  • Questions
  • What does the FI do to start the process?
  • Who assesses value to the services provided and
    adjusts the lease cost?
  • Are all services provided grounds for IKC?
  • Resolution
  • The FI submits a list of services provided and
    the savings to the installation.
  • The U.S. Army Corps of Engineers and G8 determine
    what discount value, as a percentage of the total
    lease, is assigned.
  • Some services the FI lists and assigns a value
    may not be deemed as IKC but more of a marketing
    service resulting in a 0 percent discount or more
    information may be required.

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Financial Education
  • On-base FIs provide no cost financial education
    training and counseling.
  • Preference to conduct personal financial
    instruction should be extended to
  • on-base FIs.
  • Nongovernment/noncommercial organizations may
    be used for financial
  • education.
  • Must be approved by Presidential-appointed,
    Senate-confirmed DoD
  • official
  • Materials must be approved by commander and
    include disclaimer.
  • DoD Financial Readiness
  • Goal is to improve financial readiness
  • DoD Instruction 1342.27, Personal Financial
    Management of Service
  • for Service Members, Nov 12, 2004
  • Build wealth and not debt

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Examples and/or Questions
  • Situation Financial education training
    conducted by off-base organizations
  • The on-base FIs have the right of first refusal.
  • Questions
  • Can off-base entities be contracted or requested
    to provide education?
  • Are the FIs allowed to promote their specific
    products and services during financial education?
  • Can other on-base organizations request the FI to
    provide education?
  • Resolution
  • Leadership issued a directive to organizations to
    utilize the on-base FIs to provide financial
    education.
  • Educated the installation organizations on the
    role of the on-base FIs, the BLO, and the support
    they provide to the base and other financial
    education partners
  • Coordination with the FIs should be through the
    BLO.

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Overseas Military Banking Program Contract and
Customers
  • Community Bank DoD owned
  • Operated by Bank of America
  • Contractor management fee paid by Military
    Departments
  • Operating expenses funded through earnings
  • Products, services, and charges set by service
    level BLOs/OMBP
  • Military personnel and dependents
  • DoD civilian personnel and dependents
  • Military disbursing officers
  • Defense credit unions
  • Organizational clients

32
Overseas Financial Institutions
  • General Information
  • Community Bank operates under the DoD contract
    which includes hours of operation, services to be
    provided, and operating locations.
  • Credit unions operate with an approved geographic
    franchise.
  • Established when a demonstrated and justified
    need exists and DoD has the appropriate approvals
    to operate in a given country
  • Country approval includes permission to operate
    under the status of forces agreement and/or other
    intergovernmental agreements, a diplomatic note,
    and host country banking industry approval.
  • Provided no cost logistical support to the
    maximum extent possible

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Overseas Financial Institutions (cont)
  • Establishment
  • Installation or community commanders requiring a
    financial institution or ATM must submit request
    through command channels to the secretary of the
    military department concerned (or designee) for
    concurrence and transmittal to the Director of
    DFAS for approval.
  • Request shall include, but not limited to
    approximate number of authorized personnel,
    distance to nearest financial institution or ATM,
    availability of official and public
    transportation, etc.

34
Overseas Financial Institutions (cont)
  • Geographic franchise information for credit
    unions
  • A Geographic Franchise is the authorization
    granted to a credit union by the OUSD(C) to
    provide financial services in a specific
    geographic region located outside the United
    States, its territories and possessions.
    Request is coordinated by the DFAS DoD Banking
    and Credit Union Office.
  • Solicitation is not required if a designated
    geographic franchise exists and credit union is
    able to accommodate request for additional
    services.
  • If geographic franchise does not exist, the
    secretary of the military department concerned
    (or designee) will solicit proposals to obtain
    one.

35
Overseas Financial Institutions (cont)
  • Closures
  • Early notification from command is paramount.
    Each country has different laws regarding
    compensation for local nationals employed by
    Community Bank and the credit unions. Additional
    severance pay may be required if notification is
    late.
  • Notification must go through command channels.
    Service department BLOs must concur on
    documentation and submit to the DoD Banking and
    Credit Union Office for action.

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