WASHINGTON—The Defense Credit Union Council, DCUC has sent a letter to senior leadership of the Senate and House banking committees calling for action to “prevent lasting credit damage to servicemembers, Coast Guard personnel, and federal employees” during government shutdowns.
In its letter, DCUC said it is fundamentally unfair for those who serve the nation or keep the government running to suffer long-term credit harm due to missed payments caused by congressional funding lapses.
During the current government shutdown, funding has been found to pay members of the military and the Coast Guard.
“During the most recent shutdown, 1.3 million active-duty servicemembers and thousands of Coast Guard members and federal employees faced pay interruptions—many of whom live paycheck to paycheck,” stated DCUC.
The organization added that missed payments can trigger fees, lower credit scores, and even jeopardize security clearances.
Members of the military received both of their October paychecks. Non-military DoD personne did not.
Stepping Up
“In the last four weeks, credit unions stepped up as ‘first financial responders,’ offering 0% furlough loans, skip-a-pay options, fee waivers, and other emergency relief. However, these voluntary measures are only temporary fixes,” Jason Stverak, DCUC chief advocacy officer, stated. “What’s needed is systemic protections—not ad hoc charity—in order to effectively, and proactively, safeguard the financial security of those who serve.”
The Recommendations
DCUC is recommending that Congress:
- Enact a “Shutdown Credit Protection Act.”
“Establish federal protections to prevent adverse credit reporting for missed payments caused by a shutdown. Modeled on CARES Act provisions, the law would require affected accounts to be reported as current or coded as ‘shutdown-related’.” - Ensure Consistent Regulatory Action and Oversight.
“Direct financial regulators (CFPB, Federal Reserve, NCUA, OCC, FDIC) and credit bureaus to apply existing flexibility and prevent shutdown-related delinquencies from harming credit scores. Regulators should reissue guidance and monitor compliance during each funding lapse.” - Support Guaranteed Pay and Broader Financial Protections. “Advance bipartisan legislation such as the Pay Our Troops Act and Pay Our Coast Guard Parity Act to ensure uninterrupted pay for uniformed personnel. Extend similar protections—like automatic forbearance and waived late fees—to civilian federal workers and contractors through expanded Servicemembers Civil Relief Act coverage.”
- Engage Industry and Nonprofits. “Collaborate with financial institutions and military family organizations to refine policies that are practical for lenders and effective for borrowers. DCUC and its member credit unions stand ready to share data and best practices from recent shutdown relief efforts.”
‘Congress Must Act’
“Credit unions will always stand by our servicemembers,” DCUC President/CEO Anthony Hernandez said in a statement. “But Congress must act to remove the threat of financial instability altogether. No American should see their credit ruined because Congress fails to fund the government.”
The Recommendations
DCUC is recommending that Congress:
- Enact a “Shutdown Credit Protection Act.”
“Establish federal protections to prevent adverse credit reporting for missed payments caused by a shutdown. Modeled on CARES Act provisions, the law would require affected accounts to be reported as current or coded as ‘shutdown-related’.” - Ensure Consistent Regulatory Action and Oversight.
“Direct financial regulators (CFPB, Federal Reserve, NCUA, OCC, FDIC) and credit bureaus to apply existing flexibility and prevent shutdown-related delinquencies from harming credit scores. Regulators should reissue guidance and monitor compliance during each funding lapse.” - Support Guaranteed Pay and Broader Financial Protections. “Advance bipartisan legislation such as the Pay Our Troops Act and Pay Our Coast Guard Parity Act to ensure uninterrupted pay for uniformed personnel. Extend similar protections—like automatic forbearance and waived late fees—to civilian federal workers and contractors through expanded Servicemembers Civil Relief Act coverage.”
- Engage Industry and Nonprofits. “Collaborate with financial institutions and military family organizations to refine policies that are practical for lenders and effective for borrowers. DCUC and its member credit unions stand ready to share data and best practices from recent shutdown relief efforts.”
‘Congress Must Act’
“Credit unions will always stand by our servicemembers,” DCUC President/CEO Anthony Hernandez said in a statement. “But Congress must act to remove the threat of financial instability altogether. No American should see their credit ruined because Congress fails to fund the government.”
