DCUC Sends Letter to HFSC Ahead of Community Banking Hearing

The Defense Credit Union Council (DCUC) sent a letter to the House Financial Services Committee (HFSC) ahead of the committee hearing titled “Make Community Banking Great Again.” In the letter, Jason Stverak, DCUC Chief Advocacy Officer, spoke of the critical role credit unions play in fostering financial stability, consumer choice, and access to affordable financial services.

​Stverak shared how credit unions operate under a not-for-profit, member-owned model that reinvests earnings into local communities. Military families, middle-class Americans, and underserved populations, in particular, benefit from the accessibility and financial advantages that credit unions provide. Notably, more than 70% of credit union branches are located in lowand moderate-income communities, filling critical gaps left by larger banks that have increasingly shuttered branches in rural and economically disadvantaged areas.

DCUC’s letter expanded in explaining the impact credit unions have in America’s communities. In 2023, credit unions saved their members over $16.5 billion in direct financial benefits compared to bank customers.

Consumers also benefit from lower mortgage and auto loan rates, with credit union mortgage rates averaging 0.25% lower than the national bank average and auto loans offering savings of one to two percentage points. Small businesses, particularly minority- and veteran-owned enterprises, rely on credit unions for funding. Despite an outdated 12.25% cap on member business lending (MBL), credit unions provided over $91 billion in small business loans last year alone, helping to drive local economic growth. Defense credit unions play a particularly vital role, often operating on military bases where forprofit banks will not.

These institutions provide financial education programs that help service members avoid predatory lending and financial hardship, reinforcing their mission to support military families. Despite these benefits, mounting regulatory and legislative challenges threatens the ability of credit unions to serve their members effectively.

The growing cost of compliance, driven by expanding oversight from the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB), disproportionately burdens smaller credit unions, reducing the resources available for member services.

Additionally, the proposed Credit Card Competition Act (CCCA) could significantly disrupt the financial marketplace by imposing routing mandates that would weaken credit unions while benefiting large retailers. Past regulatory changes, such as those introduced by the Durbin Amendment, have led to increased banking costs for low-income consumers and a decline in free checking services.

Stverak noted how further challenges come from ongoing threats to credit unions’ not-for-profit tax-exempt status, despite their proven economic contributions; and at the same time, credit unions face unfair competition from unregulated fintech companies, which operate outside traditional banking regulations while competing for the same consumers.

“DCUC is calling on Congress to take immediate action to ensure a fair and competitive financial landscape,” says Stverak. “This includes reducing unnecessary regulatory burdens, protecting credit union interchange revenue, supporting bipartisan efforts to remove the arbitrary MBL cap for veteran-owned businesses through H.R. 4867—the Veterans Members Business Loan Act—and preserving credit unions' tax-exempt status.”

​Stverak adds, “Congress must act to support these institutions, ensuring they can continue providing affordable and accessible financial services to families, businesses, and military communities nationwide.”