WASHINGTON — With Sen. Elizabeth Warren (D-MA) set to become the new Senate Banking Chair, the Defense Credit Union Council is urging the senator to oppose a blanket 10% cap on credit card interest rates, warning that the proposal could restrict access to credit for service members, veterans and underserved families.
DCUC is also urging Congress to prevent a pre-Christmas government shutdown.
The 10% interest rate cap was a populist issue in the lead-up to the mid-term elections, with President Trump expressing his support.
In a Nov. 6 letter, DCUC Chief Advocacy Officer Jason Stverak requested a 30-minute meeting with Warren, her staff and defense credit union representatives, including leaders of smaller institutions. The council said a rigid cap could lead to tighter approvals, lower credit limits and fewer borrowing options for people building or repairing their credit.
“A lower rate means little to a military family whose application is denied,” DCUC President and CEO Anthony Hernandez said. “Servicemembers, veterans, and families building credit need lenders able to say yes responsibly.”
Senator Has Expressed Support
The appeal responds to Warren’s support for rate-cap legislation. According to DCUC, Warren said in a Jan. 9 statement that she was willing to help pass legislation capping card rates and pressed federal banking regulators in an April 27 letter about President Donald Trump’s promised 10% cap.
DCUC said federal credit unions already operate under a 15% statutory interest rate cap, with the National Credit Union Administration authorized to establish a higher ceiling. The council said NCUA has set the general ceiling at 18% through Sept. 10, 2027. The additional 3 percentage points are part of the permitted interest rate, rather than a separate fee.
The council said credit unions must cover the costs of funding loans, maintaining secure systems, preventing fraud and absorbing credit losses. Smaller institutions spread many of those costs across fewer accounts, making a blanket cap particularly challenging, it said.
‘Painful Decisions’
“Credit unions cannot erase the costs of funding loans, preventing fraud, and absorbing losses because Washington chooses a number,” Stverak said. “A blanket 10% cap would force painful decisions about credit availability and member services.”
DCUC cited a February working paper by Federal Reserve Bank of Philadelphia economists whose model found that a 10% cap would reduce credit limits and leave borrowers with weaker credit worse off overall. DCUC acknowledged that borrowers who retained their cards could benefit from lower interest costs, but urged lawmakers to consider those who could lose access.
Some households denied credit could turn to payday lenders where permitted by law, costly installment loans or other expensive alternatives, while others could fall behind on essential bills, DCUC warned. The council also cited Congressional Research Service analysis identifying the risk that reduced access could push borrowers toward more expensive credit outside the banking system.
“Congress cannot call a loan affordable when a family can no longer qualify for it,” Stverak said.
Offer to Work With Senator
The latest appeal follows DCUC’s January correspondence with Warren and its February 2025 opposition to the rate-cap proposal by Sens. Bernie Sanders and Josh Hawley.
DCUC said it is offering to work with Warren’s office on clearer disclosures, enforcement against deceptive practices, financial counseling and responsible emergency lending. It also urged Congress to preserve NCUA’s authority under current law and examine potential effects on approvals, credit limits and alternative borrowing options before advancing a blanket cap.
The Credit Card Competition Act could also see renewed action in Congress in the lame duck session, as the CU Daily reported here.
Congress Urged to Prevent Another Shutdown
Separately, DCUC is urging congressional leaders to prevent a government shutdown just before Christmas and enact permanent protections ensuring military personnel, including Coast Guard members, receive their earned pay on schedule during any funding lapse.
In a Nov. 8 letter addressed to House Speaker Mike Johnson, House Minority Leader Hakeem Jeffries, Senate Majority Leader John Thune and Senate Minority Leader Charles E. Schumer, DCUC calls for action before the December 11, 2026, funding deadline just two weeks before Christmas.
“No military family should approach Christmas wondering whether the government will pay them for their service. Many will already be spending the holiday apart because duty requires it. Congress should not add financial uncertainty to that sacrifice,” DCUC President and CEO Anthony Hernandez said in a statement. “Protecting military pay, including Coast Guard pay, is a basic obligation. Financial readiness is essential to mission readiness.”
‘Permanent Protections Urged’
The letter calls on Congress to fund the government beyond December 11 and establish permanent, automatic protections for earned military pay and allowances.
DCUC said those protections must expressly include the Coast Guard and eligible National Guard and Reserve personnel, provide the necessary appropriations and payment authority, and keep essential payroll personnel and systems operating. If broader negotiations remain unresolved, DCUC is calling on lawmakers to advance a clean military pay measure without unrelated policy conditions.
‘Bills Will Not Wait’
“December 11 is just two weeks before Christmas. Rent, groceries and childcare bills will not wait for Congress to finish a political fight,” said Jason Stverak, DCUC Chief Advocacy Officer. “If broader funding talks stall, bring a clean military pay bill to the floor. Do not make a military family’s Christmas budget a bargaining chip.”
DCUC emphasized that the Coast Guard requires explicit protection because it ordinarily operates within the Department of Homeland Security. A defense funding agreement alone does not necessarily protect Coast Guard pay.
DCUC reminded that this year’s DHS shutdown lasted 76 days before ending April 30. The Coast Guard Foundation reported that a segment of the service’s civilian workforce received only partial pay on February 27. The letter points to that disruption and the prolonged uncertainty facing Coast Guard households as reasons to act before another funding deadline.
“Credit unions stepped up when families needed help, and DCUC is proud of that response. But no service member should have to borrow the paycheck the government owes them,” Stverak added. “Congress needs to protect these families before lawmakers leave Washington for their own Christmas celebrations.”
