WASHINGTON—Ahead of a markup in the House Financial Services Committee, the Defense Credit Union Council (DCUC) sent a letter expressing strong opposition to the proposed 10% interest rate cap as an amendment to any legislation that was being considered.
It was also part of a joint letter with America’s Credit Unions and other organizations that voices objections to the Credit Card Competition Act.
As the CU Daily reports here, the 10% card cap proposal was rejected by the committee on Thursday.
In its letter, DCUC stressed that a 10% interest rate cap would be “especially harmful to servicemembers, veterans, and military families who rely on credit unions for safe, affordable, and mission-critical financial services.”
DCUC said it also sought to remind federal credit unions operate under a longstanding statutory interest rate cap, currently 18% for most loans, and fully comply with the Military Lending Act’s cap for loans to active-duty servicemembers. These safeguards reflect the credit union mission to put people over profits and ensure lending practices remain fair, responsible, and focused on member well-being.
‘Real-World Implications’
DCUC Chief Advocacy Officer Jason Stverak highlighted the real-world implications for financial readiness and stability, sharing that credit unions routinely provide small-dollar loans, emergency credit, and short-term financial relief to help military families manage unexpected expenses, deployments, and financial disruptions.
Under an arbitrary 10% cap, many of these programs could become unsustainable, DCUC said.
“Military families deserve policies that strengthen their financial security – not well-meant policies that inadvertently jeopardize it by shutting down access to trusted, affordable credit,” the letter states. “Limiting credit unions’ ability to serve servicemembers in the field of consumer credit would directly undermine military financial readiness, as troops distracted by personal financial crises cannot fully focus on their missions.”
Additional Warning
Stverak further warned that restricting responsible, regulated lenders does not eliminate the need for credit but instead risks driving vulnerable borrowers toward predatory alternatives. If credit unions are constrained by an artificially low cap, servicemembers and lower-income families may be pushed toward payday lenders, pawnshops, or unregulated online lenders that evade rate limits and consumer protections.
In the letter, DCUC cited research it said reaffirms that jurisdictions with very low usury caps often experience reduced access to mainstream credit and increased reliance on higher-cost, riskier financial products.
A Broader Threat
Beyond lending, DCUC stressed that interest rate caps threaten the broader ecosystem of member services credit unions provide, including financial counseling, fraud protection, budgeting assistance, and financial education programs tailored to military families.
These services are essential components of financial readiness and resilience encouraged by Congress and the Department of Defense. A sweeping cap could unintentionally undercut these critical support systems, according to the organization.
“The problem facing military consumers is not credit unions, it is the bad actors who operate outside the confines of federal consumer protection laws,” DCUC wrote.
Joint Letter Sent on CCCA
In the joint letter, a broad coalition of financial services organizations urging Congress to reject the Credit Card Competition Act, also known as the Durbin-Marshall bill, and any expansion of the Durbin amendment.
In a joint letter to lawmakers, the groups warned that increased government intervention in the U.S. credit card market would harm consumers, small businesses, and community-based financial institutions.
‘Consistent’ Warning
“For years, DCUC has consistently warned Congress that the Durbin-Marshall proposal poses serious risks to the credit union mission and to the military communities we are proud to serve,” DCUC President/CEO Anthony Hernandez said in a statement. “This legislation would undermine community-based financial institutions that prioritize responsible lending and consumer protection, while increasing the likelihood that servicemembers and their families are pushed toward predatory, unregulated lenders. We remain deeply concerned that, rather than improving competition or affordability, this bill would weaken financial readiness and harm the very consumers it claims to protect.”
