WASHINGTON — The Defense Credit Union Council has urged federal regulators to maintain flexible, risk-based regulatory frameworks as they finalize new anti-money laundering and stablecoin oversight rules, arguing that credit unions should not be subject to one-size-fits-all compliance requirements.
In separate comment letters to federal agencies, DCUC expressed support for proposed efforts to modernize anti-money laundering and countering the financing of terrorism (AML/CFT) regulations and establish oversight standards for payment stablecoins, while cautioning regulators against imposing unnecessary burdens on smaller financial institutions.
In comments submitted to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the National Credit Union Administration, DCUC backed a proposed rule implementing provisions of the Anti-Money Laundering Act of 2020 and modernizing AML/CFT program requirements. The proposal was developed in coordination with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
“DCUC generally supports the proposal’s transition toward risk-based, effective AML/CFT programs,” Jason Stverak, DCUC’s chief advocacy officer, wrote in the letter. “We believe the proposal appropriately emphasizes risk-based supervision, program effectiveness, and institution-specific risk management.”
Need for a Tailor
According to DCUC, the organization supports tailoring compliance expectations to the size, complexity and risk profile of individual institutions rather than applying uniform standards across the industry. The trade group also called for flexibility in risk assessments, documentation and program maintenance requirements.
DCUC further urged regulators to provide consistent examiner training and supervisory guidance to ensure uniform implementation of the new framework across regions.
“A risk-focused examination framework allows supervisory resources to be directed toward the most significant concerns while reducing unnecessary burden on smaller institutions that maintain effective compliance programs,” Stverak said.
The organization also supported the proposal’s recognition of technology that can strengthen AML/CFT compliance efforts but cautioned against requiring institutions to adopt specific tools regardless of their size or capabilities. DCUC recommended an implementation period of 18 to 24 months following publication of a final rule, along with industry training and coordinated guidance among regulators.
Comment on OFAC Proposal
In a separate comment letter, DCUC commented on a joint proposed rule from FinCEN and the Treasury Department’s Office of Foreign Assets Control implementing provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act.
The proposal would classify permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act and establish anti-money laundering and sanctions compliance requirements for those entities.
DCUC said it supports Treasury’s efforts to combat illicit finance while encouraging responsible innovation in digital payments.
“DCUC supports Treasury’s efforts to combat illicit finance and implement the GENIUS Act in a manner that promotes financial integrity and responsible innovation,” Stverak said. “As this framework is developed, it is critical that implementation remains workable for credit unions and does not unintentionally limit their ability to participate in emerging payment systems.”
Call for Proportionality
The organization urged regulators to ensure compliance requirements remain proportionate to an institution’s level of involvement in stablecoin activities and argued that credit unions with limited exposure should not face the same supervisory expectations as large-scale stablecoin issuers.
DCUC also called on regulators to avoid duplicative requirements, noting that many credit unions already maintain Bank Secrecy Act, customer due diligence, suspicious activity reporting and sanctions compliance programs.
The trade group further requested advance guidance, training materials and industry webinars before examinations begin and encouraged continued coordination among federal agencies to promote consistent implementation of the new rules.
