WASHINGTON–The Defense Credit Union Council (DCUC) is calling on the National Credit Union Administration to move quickly to establish rules governing credit union participation in the stablecoin market, warning that failure to ensure competitive parity with banks could threaten credit union deposits, increase funding costs and reduce lending to military families and other members.
The council’s appeal follows the Office of the Comptroller of the Currency’s announcement of its final rule implementing the GENIUS Act, which establishes a regulatory framework for payment stablecoins.
“The OCC’s announcement makes NCUA’s next steps critical for credit unions,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. “Credit unions need a workable path to offer responsible payment innovation, compete alongside banks, and keep serving their members.”
Stverak said the NCUA should act promptly to ensure military families can access emerging payment options through their existing credit unions.
Warning About Deposit Flight, Lending
According to DCUC, the implications of stablecoin regulation extend beyond credit unions that might directly issue digital payment instruments.
The organization warned that rewards offered on stablecoins could attract deposits away from credit unions, potentially raising their funding costs and reducing the money available for mortgages, emergency loans and financing for veteran-owned businesses.
DCUC also raised concerns that rewards programs could be structured to circumvent the GENIUS Act’s prohibition on interest payments.
“The OCC removed its proposed presumption against certain third-party rewards arrangements, but the interest prohibition remains,” Stverak said.
He called on the NCUA to coordinate enforcement with other regulators and examine the economic substance of rewards arrangements, including those involving affiliates and third-party partners.
“Calling a payment a reward should not become a workaround for prohibited interest,” Stverak said.
DCUC also urged Congress to close statutory gaps that regulators cannot address through rulemaking.
Seeking Parity With Banks
A central recommendation from DCUC is that the NCUA establish explicit parity between bank deposits and credit union shares when determining eligible stablecoin reserve assets.
The organization welcomed the OCC’s recognition of on-demand credit union share accounts in its liquidity requirements but said additional action is necessary.
“NCUA should build on it so credit unions have a fair opportunity to hold eligible reserve funds and participate in the payments market,” Stverak said.
DCUC also said the regulatory framework must recognize the cooperative structure of credit unions rather than simply applying requirements designed for banks.
Among its recommendations, DCUC called for the NCUA to:
- Permit jointly owned subsidiaries that would allow credit unions of different sizes to share the costs of participating in stablecoin activities.
- Clarify CUSO investment rules, particularly how pledged stablecoin reserves interact with existing credit union service organization investment limits.
- Preserve investment opportunities that are otherwise lawful under different regulatory frameworks.
- Address field-of-membership restrictions within the agency’s existing authority and identify changes requiring congressional action.
- Establish proportionate capital and liquidity requirements that reflect the risks associated with individual issuers.
DCUC warned that applying bank-oriented rules without accounting for credit unions’ organizational differences could create unnecessary barriers to entering the payments market.
Reporting, Compliance Costs Also Raised
The council also called for reporting and supervisory requirements that do not impose disproportionate costs on smaller credit unions.
DCUC recommended allowing monthly issuer reporting when sufficient for regulatory supervision and avoiding duplicative reporting obligations.
The OCC retained weekly and quarterly reporting requirements in its final rule, according to DCUC. The organization said that if the NCUA adopts a similar approach, it should provide comparable relief for eligible smaller issuers.
DCUC further recommended that the additional costs of supervising stablecoin activities be funded through limited assessments on participating entities.
That approach, it said, would protect credit unions that do not participate in stablecoin activities from having to subsidize the oversight through general operating fees or the overhead transfer from the National Credit Union Share Insurance Fund.
Calls for Roadmap Ahead of January Deadline
With the OCC rule scheduled to take effect Jan. 18, 2027, DCUC urged the NCUA to publish an implementation roadmap before that date.
The council said the roadmap should address several issues, including:
- Application requirements and regulatory decision timelines.
- Criteria for lawful transition relief.
- Regulatory treatment of custody-only stablecoin services and tokenized credit union shares.
- Plain-language disclosures explaining that payment stablecoins are not federally insured credit union share accounts.
- A review of the regulations within the first year of implementation.
“Credit unions need timely answers to plan investments and serve members responsibly,” Stverak said.
DCUC emphasized that stablecoin regulation should balance opportunities for payment innovation with the protection of traditional credit union lending and member services.
“DCUC wants NCUA to deliver rules that give credit unions a fair chance to compete, preserve their capacity to lend, and protect the servicemembers, veterans, and military families who depend on them,” Stverak said.
