Washington, D.C. (March 3, 2025) |
The Defense Credit Union Council (DCUC) sent a letter to Maryland Senate leaders, the Honorable Pamela Beidle and the Honorable Antonio Hayes, expressing strong opposition to SB0917. DCUC warns that the proposed legislation would impose undue financial and operational burdens on military families while primarily benefiting large retailers.
In the letter, DCUC discussed how interchange fees fund cybersecurity, fraud prevention, and the operational costs necessary to maintain a secure financial network for military families. DCUC believes reducing these fees could compromise security, increase the risk of identity theft, and limit access to credit for service members.
DCUC noted how similar legislation has failed in 31 states due to significant legal and financial concerns, stating “the only instance of passage in Illinois was quickly met with federal litigation…on December 20, 2024, [which] indicates that such laws are likely to violate the federal rights of financial institutions.” DCUC shared how the Office of the Comptroller of the Currency (OCC) has also raised concerns that measures like SB0917 could lead to increased fraud, restricted access to credit, and disruptions to payment systems—placing military families at financial risk.
For military families, defense credit unions provide a trusted financial network that moves with them wherever they serve. DCUC explained that SB0917 would drive up operational costs, potentially leading to increased fees, reduced services, and diminished credit card rewards programs—benefits that are often essential for covering travel and relocation expenses.
DCUC also believes the bill’s purported benefits to small businesses are misleading.
“The projected savings for a Maryland small business with $1 million in annual taxable sales would amount to just $649 per year, or $54 per month. Meanwhile, large national retailers such as Home Depot stand to save nearly $1.89 million annually demonstrating that this bill benefits big-box stores at the expense of financial institutions that serve our service members and their families,” wrote Jason Stverak, DCUC Chief Advocacy Officer.
Stverak also touched on how defense credit unions operate within highly secure military environments, and implementing SB0917 would require costly payment infrastructure updates, leading to increased costs passed on to military families, disruptions at on-base retailers, commissaries, and exchanges, and delays in financial transactions, posing challenges for deployed service members managing finances remotely.
“There is no evidence that exempting sales tax from interchange fees would lead to lower prices for consumers,” added Stverak. “In states without sales tax, such as Delaware and Oregon, retail prices remain consistent with states that do impose a sales tax suggesting that retailers would not pass any savings from this bill to consumers, including military families. SB0917 presents significant risks to financial institutions that serve military families, disrupts secure payment systems, and ultimately benefits large retailers while providing little to no real savings for small businesses.”
DCUC urges Maryland lawmakers to reject SB0917 to protect the financial security of service members, veterans, and their families.
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.