WASHINGTON — The Defense Credit Union Council is urging Congress to strengthen fraud prevention efforts while avoiding policies that would shift liability to credit unions for scams that originate outside their control, according to a letter the organization sent ahead of a House hearing on emerging fraud threats.
The letter was sent to Rep. Pete Sessions, R-Texas, chairman of the House Oversight and Government Reform Subcommittee on Government Operations, and Rep. Kweisi Mfume, D-Md., the panel’s ranking member, in advance of the subcommittee’s July 15 hearing, “Emerging Fraud Threats and the Evolving Fraud Landscape.”
According to DCUC, the letter outlines growing fraud risks facing servicemembers, veterans, federal employees, retirees and their families, including identity theft, account takeovers, payment scams, elder financial exploitation, artificial intelligence-enabled fraud, synthetic identity fraud and benefit-related scams.
First Line of Defense
“Defense credit unions are often the first line of defense when military and veteran families are targeted by fraudsters,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. “Servicemembers and veterans face unique financial risks because of deployments, frequent relocations, remote account access and reliance on federal benefit systems. Congress has an important opportunity to strengthen fraud prevention, improve coordination and ensure credit unions have the tools they need to protect their members.”
DCUC said its member credit unions already combat fraud through member education, employee training, scam alerts, account monitoring, suspicious transaction detection, elder fraud prevention and partnerships with law enforcement, federal agencies, military installations, veterans’ organizations and community groups.
The organization also urged lawmakers to pursue what it described as a balanced policy approach that focuses on criminal actors rather than broad liability shifts for financial institutions.
The Recommendations
Among its recommendations, DCUC called for:
- Stronger public-private information sharing among financial institutions, law enforcement, payment networks, telecommunications providers and digital platforms.
- Improved interagency coordination to identify and stop payment scams before funds are lost.
- Modernized payment and funds-availability rules that provide credit unions with greater flexibility to delay or verify suspicious transactions when fraud indicators are present.
- Greater support for smaller financial institutions adopting advanced fraud detection, identity verification and cybersecurity technologies.
- Risk-based, privacy-focused federal digital identity systems.
- Increased fraud education targeting military and veteran communities through defense credit unions, military installations, veterans’ organizations and federal agencies.
Additional Recommendation
DCUC also urged Congress to consider the unique financial risks associated with military deployments, frequent relocations, overseas assignments and the needs of military spouses, caregivers, veterans and retirees when developing fraud prevention policies.
“Protecting military and veteran communities from fraud is not only a consumer protection issue; it is a financial readiness, national security and public trust issue,” Stverak said, according to DCUC.
