Defense Credit Union Council urges congressional action on key legislative priorities for military-focused credit unions ahead of lame-duck session
WASHINGTON, D.C. (November 1, 2024) — As the lame-duck session approaches, the Defense Credit Union Council, (DCUC), sent a letter to the U.S. House and Senate, emphasizing critical legislative priorities for the nation’s nearly 200 defense credit unions and the 40 million members they serve, particularly active-duty military, veterans, and their families.
In the letter, DCUC Chief Advocacy Officer Jason Stverak calls on Congress to address several pressing issues impacting credit unions serving these important communities. Stverak called attention to the following priorities:
Opposing the Durbin-Marshall Interchange Legislation
DCUC emphasized how the Durbin-Marshall proposal aims to cap credit card interchange fees, mirroring limits already placed on debit fees. While this may appear to benefit merchants, it threatens the financial health of credit unions. Credit card interchange fees fund critical services, including fraud protection and rewards programs. Reduced fees could force defense credit unions to limit these offerings, directly impacting service members, veterans, and their families.
When debit fees were capped, consumers saw little benefit, as financial institutions raised other fees. A similar impact on credit card fees could increase costs for military families. Interchange fees support robust fraud detection systems. DCUC believes lowering these fees could reduce protections, leaving military and veteran members more vulnerable to fraud and cyber risks.
Opposing Non-Member Share Insurance Coverage
DCUC highlighted how recent proposals would extend National Credit Union Share Insurance Fund (NCUSIF) coverage to non-member deposits, undermining the member-owned credit union model and increasing risks. Credit unions are not-for-profit cooperatives dedicated to their members. DCUC believes expanding insurance to non-members could dilute this structure, impacting service quality.
This also introduces additional financial risk. Covering non-member deposits could strain the NCUSIF, leading to potential assessments on credit unions and increased costs. Specifically for
defense credit unions, expanded insurance coverage could divert focus from serving military families.
Supporting the Veterans Member Business Lending (MBL) Bill
This bill would exempt loans to veteran-owned businesses from the statutory lending cap, supporting veteran entrepreneurs who face challenges in transitioning to civilian life. By lifting the MBL cap for veteran businesses provides affordable credit, this will allow veterans to start and grow their businesses, which in turn contributes to local economies.
DCUC also believes this legislation allows defense credit unions to better support veterans and military families through access to essential credit.
Preserving the credit union tax status is vital to credit unions delivering affordable financial services. Challenges to this status threaten the unique, member-focused model that benefits their membership, especially service members, veterans, and their families. Defense credit unions use tax-exempt status to offer lower loan rates, higher savings interest, and reduced fees—benefits that directly impact military and veteran members. The current tax exemption also enables credit unions to serve rural, underserved communities and low-income populations.
Passing Permanent Central Liquidity Facility (CLF) Reform
DCUC advocates for permanent CLF reform, ensuring credit unions have access to reliable liquidity during economic downturns. A permanent CLF enhances economic stability, providing credit unions a safety net to manage liquidity challenges, critical for member stability during crises.
Ensuring liquidity stability empowers credit unions to expand and compete with larger institutions, benefiting service members, veterans, and their families with better access to credit and financial services.
“We urge Congress to address these issues and support each of these priorities to ensure defense credit unions can continue providing secure, affordable, and high-quality services to our military, veterans, and their families,” said Stverak.
“It’s important to highlight industry concerns and initiatives during this time as lawmakers finish their work in the current Congress,” said Anthony Hernandez, DCUC President/CEO. “DCUC is leading the way on behalf of our members and the communities they serve.”
For more information on DCUC’s advocacy, please visit dcuc.org/advocacy and contact Jason Stverak, DCUC Chief Advocacy Officer at jstverak@dcuc.org.
About Defense Credit Union Council (DCUC)
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 37 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
