Academic journal article ABA Banking Journal

Peace a Mixed Blessing for Military Banks

Academic journal article ABA Banking Journal

Peace a Mixed Blessing for Military Banks

Article excerpt

This recession so far hasn't touched one group of banks: those that serve the military. The business tends to be very steady.

Except when the armed forces get cut back, that is. Between now and 1997, the Administration is due to cut defense spending 20% and armed forces 25%, according to a plan it submitted last February. Congress may slash the defense budget further.

Donald J. Gudinas, president of Eisenhower National Bank, Fort Sam Houston, Tex., and president of the Association of Military Banks of America, Great Falls, Va., says the reduction will affect all U.S. banks and credit unions serving the military.

However, some of the layoffs will occur at overseas bases, so the entire 25% won't be felt here.

A few operations, such as Fort Bragg, N.C., and Fort Hood, Tex., will receive additional troops. Others, such as Fort Ord, Calif., and Lowry Air Force Base, Denver, are scheduled to close, according to Wendell McHenry Jr., executive vice-president of the military bank association, whose members are the 110 U.S. banks that have a franchise on military base. Banks will start to be affected by the defense cuts in late 1992 and continue to feel them for the next three years, McHenry says. …

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