WASHINGTON — The Defense Credit Union Council is pressing Congress to ensure credit unions can participate fully in the emerging digital-asset marketplace while warning that proposed legislation could create uncertainty for military families stationed overseas and leave credit unions at a disadvantage to banks.
In two letters to congressional committees, DCUC called for clearer rules allowing credit unions to offer cryptocurrency, stablecoin and other digital-asset services while maintaining consumer protections, safety-and-soundness standards and existing anti-money-laundering requirements.
One letter was submitted to the House Small Business Subcommittee on Innovation, Entrepreneurship, and Workforce Development ahead of its Sept. 15 hearing, “Main Street Meets Crypto: What Digital Assets Mean for Small Businesses.”
Second Letter Sent
A second letter to Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren focused on the Senate’s work on H.R. 3633, the Digital Asset Market Clarity Act, or CLARITY Act, and particularly its potential effects on military families stationed outside the United States.
DCUC President and CEO Anthony Hernandez said Congress should ensure credit unions have a workable path into the digital-asset marketplace.
“Small businesses should be able to choose their trusted, member-owned credit union as digital asset services evolve,” Hernandez said. “In support of that, Congress should ensure credit unions have a clear and workable path to provide these services while maintaining the safeguards and personal guidance their members depend on.”
Focus on Small Businesses
In its House comments, DCUC argued digital-asset policy should be evaluated partly on its practical benefits for small businesses, including faster payments, more efficient transactions, transparent costs and access to financial guidance.
The organization said credit unions should be included in digital-asset and market-structure frameworks and should have access to the infrastructure, technology providers and shared-service arrangements necessary to participate.
The Specifics
DCUC specifically called for policies that would:
- Allow credit unions to participate in stablecoin activities through appropriate structures while protecting deposits that support local lending.
- Avoid compliance requirements that disproportionately burden smaller financial institutions.
- Coordinate regulatory requirements among federal agencies and recognize existing credit union safeguards where appropriate.
- Provide clear regulatory guidance, examiner training and reasonable implementation periods.
- Ensure new digital-asset services include operational controls protecting member assets and personal information.
“Innovation should expand choices for small businesses,” said Jason Stverak, DCUC’s chief advocacy officer. “Credit unions can help members understand the opportunities and risks of digital assets, but they need clear rules, workable infrastructure and a regulatory framework that allows them to compete and serve members responsibly.”
Overseas Military Families Raise Separate Concern
DCUC’s Senate letter focuses in part on language in Section 10404 of a proposed Senate substitute for the CLARITY Act.
According to DCUC, a residence-based definition used in connection with certain payment-stablecoin compensation restrictions and protections does not amount to a blanket prohibition against overseas access but could create uncertainty for Americans stationed abroad.
DCUC wants Congress to make clear that an official overseas assignment does not cause otherwise eligible military households to lose access to lawful digital financial services.
“An overseas assignment should change a family’s location, not its access to lawful financial services or its credit union’s ability to provide them,” Stverak wrote.
The organization asked Congress to expressly cover servicemembers, including National Guard and Reserve personnel serving on orders, as well as accompanying spouses and dependents and federal civilian employees and their families serving on official overseas assignments.
DCUC said those individuals should not have to maintain a physical U.S. residence to receive relevant U.S.-person treatment under the legislation.
Continuity of Financial Services Sought
DCUC also wants a broader military-service continuity provision ensuring otherwise eligible members do not lose access to accounts, payment services, qualified digital-asset safekeeping or payment-stablecoin redemption solely because government orders place them overseas.
The protection should extend to the institutions serving them, DCUC said.
The council wants the legislation to ensure U.S. federally and state-chartered credit unions, authorized overseas branches, qualifying subsidiaries, credit union service organizations and lawful service-provider arrangements are not treated as foreign providers simply because they serve eligible military households overseas.
DCUC also called for federal financial regulators to coordinate with defense officials and state regulators on implementation issues such as military mailing addresses, official duty documentation, remote identity verification and location-based access controls.
A domestic street address should not be the sole method for demonstrating a military household’s eligibility, the organization said.
DCUC stressed that its proposed changes would not eliminate sanctions requirements, anti-money-laundering rules, consumer protections, credit union membership and charter requirements or safety-and-soundness oversight. The provisions also would not override applicable host-country laws or international agreements.
DCUC Seeks Parity With Banks
Beyond the military provisions, DCUC said the Senate proposal has made progress toward clarifying how credit unions would be treated under federal digital-asset rules but said differences remain between the treatment of banks and credit unions.
Among the changes DCUC is seeking are:
- Comparable authority and registration treatment for banks and credit unions performing similar digital-asset activities.
- Consistent rules governing safekeeping of digital assets.
- Inclusion of the National Credit Union Administration in key regulatory decisions affecting credit unions.
- Protections for credit union member savings and the funding institutions use to provide affordable credit.
“Our request is not special treatment or protection from competition,” Stverak wrote. “It is a fair opportunity to provide lawful services safely, with the same clarity Congress provides to banking institutions.”
DCUC has previously raised similar concerns with the Senate Banking Committee, including requests for equal access to digital settlement infrastructure, workable custody and capital rules and explicit protections for military personnel and their families stationed overseas.
Stablecoins Also in Focus
DCUC also emphasized that credit unions already have a potential path into the stablecoin market under recently enacted federal legislation.
“The GENIUS Act already provides an approval framework for qualifying credit union subsidiaries to issue payment stablecoins,” Stverak said. “The proposed account corrections improve legal certainty. They do not create credit unions’ first opportunity to participate. A payment stablecoin does not become federally insured merely because a credit union is involved.”
DCUC said lawmakers should pursue targeted statutory corrections separately if negotiations over the broader CLARITY Act take additional time. The organization also supports regulatory action where agencies already possess authority but said regulators cannot substitute for Congress when changes to federal law are required.
Military Families Should Have to Wait
“We should not make military families or their credit unions wait indefinitely for Congress to get these details right,” Hernandez said. “If the broader bill takes longer, lawmakers should pursue targeted corrections that protect access and provide certainty.”
Stverak said the underlying objective is to ensure servicemembers do not lose access to emerging financial services because of their duty station.
“The Americans ordered overseas to defend our country should not be left outside the financial future Congress is creating,” Stverak said. “Their credit unions should be able to serve them wherever their duty takes them.”
