WASHINGTON–The Defense Credit Union Council said it is pleased to see the House Armed Services Committee had advanced the FY27 National Defense Authorization Act without any “negative language impacting credit unions,” and is now on watch for the threat of such language to be inserted in the full Senate.
Among the issues it is watching, according to Jason Stverak, chief advocacy officer with the DCUC, is any attempt to open the Federal Credit Union Act to permit the NCUSIF to cover non-credit union deposits. That became an issue last year when Navy Federal Credit Union—after winning the contract to operate “Community Banks” on defense installations overseas—sought to have the credit union insurance fund also provide coverage for deposits in those banks.
DCUC, along with many credit unions, opposed the change and, ultimately, Navy Federal turned to private deposit insurer American Share Insurance for deposit insurance.
“That battle or that that issue is still at the forefront of our monitoring to ensure that that that issue doesn’t move forward again,” said Stverak.
DCUC Priorities
The Defense Council said its priorities for the NDAA process include:
- Recognition of military financial services as a readiness issue
- Strengthening liquidity tools and operational flexibility for credit unions
- Supporting modernization efforts that improve governance and efficiency
- Protecting the member-owned credit union structure from adverse policy changes
- Ensuring continued access to safe, affordable financial services for military communities
An Annual Carrying Horse
The massive, must-pass NDAA has traditionally also been a carrying horse for non-defense related bills that have not passed and which are added as amendments. That includes credit card interchange legislation that the CU lobby has opposed, and other bills credit unions have favored.
That is likely to happen again this year, said Stverak during a call with the media, but in response to a question from the CU Daily he said the FY2027 NDAA may be different.
“I think that there will be attempts to put other legislation on this as it’s an election year and the partisanship seems to be ratcheting up,” said Stverak. “The NDAA is probably going to be one of the only vehicles that other bills can move forward on. But I believe the leadership in not only the Senate committee but the entire Senate will accept only things that are non-controversial. I don’t think that they want to delay the passage of the NDAA for appearance reasons so that it cannot be used as part of the general election. They also know they need to get it done sooner rather than later, and we’ve been told the goal is to get to the floor and pass before July 4th
The Realities of Reelections
Saying he doesn’t mean to be cynical, Stverak added that many members of Congress seeking reelection are going to want to send out press releases around passage of the NDAA, which is why he believes a “cleaner” version of the bill will pass.
Stverak added he is hopeful “non-controversial” bills such as the Credit Union Board Modernization Act and language related to NCUA’s Central Liquidity Facility, which have been included in prior legislation, will be attached to the FY27 NDAA.
A Tight Deadline
Greg Mesack, SVP-advocacy with America’s Credit Union agreed timing will play a role.
“With a tight timeline and in a very closely divided Congress, there is little room for contentious provisions, such as interchange, to be added to NDAA. In order to pass the bill, leadership will be working to keep the bill focused and free of controversy,” Mesack said.
