WASHINGTON — The Defense Credit Union Council is urging Congress to protect military families from financial disruptions caused by government funding lapses and to preserve federal support for community development lending programs, according to separate letters submitted to lawmakers this week.
In a letter submitted for the record ahead of a House Committee on Homeland Security hearing on the Department of Homeland Security’s fiscal 2027 budget request, DCUC called for a permanent funding mechanism that would ensure members of the U.S. Coast Guard continue receiving pay during future lapses in DHS appropriations.
The trade group said past funding disruptions created financial hardship for Coast Guard personnel and their families, prompting defense credit unions across the country to provide emergency assistance.
‘Families Deserve Certainty’
“Coast Guard members and their families deserve the same financial certainty that supports readiness across the military community,” DCUC President and CEO Anthony Hernandez, a retired U.S. Air Force colonel, said in a statement. “When servicemembers are asked to continue their mission during funding disruptions, they should not also have to worry about meeting basic household expenses.”
DCUC Chief Advocacy Officer Jason Stverak told lawmakers that defense credit unions mobilized during previous funding interruptions by offering no-interest loans, payroll advances, payment relief, financial counseling and other assistance programs.
“These were not abstract budget events; they imposed real hardship on Coast Guard families and the broader DHS workforce,” Stverak wrote. “These programs were practical lifelines for families trying to buy groceries, keep current on bills, and avoid long-term credit damage.”
DCUC said ensuring uninterrupted pay for Coast Guard personnel would strengthen military readiness, morale and family stability.
Letter on CDFIs
Separately, DCUC urged the Senate Finance Committee to reject the Trump administration’s proposed reduction and restructuring of the Community Development Financial Institutions Fund, arguing the changes would undermine financial services in underserved and military-connected communities.
In a letter submitted ahead of a hearing with Treasury Secretary Scott Bessent, DCUC called on lawmakers to preserve the CDFI Fund’s full statutory program portfolio and maintain funding at no less than the current enacted level of $324 million.
The organization said mission-driven credit unions rely on CDFI resources to provide emergency small-dollar loans, financial counseling, affordable housing support, small-business financing and other community investments.
Funds Reductions
As the CU Daily has reported and DCUC noted, the administration’s fiscal 2027 budget proposal would reduce newly appropriated funding for the CDFI Fund from $324 million to $119.5 million, a 63.1% reduction. The proposal also would eliminate funding for several longstanding programs, including:
- The CDFI Program
- The Native American CDFI Assistance Program
- The Bank Enterprise Award Program
- The Healthy Food Financing Initiative
- The Small Dollar Loan Program
- The Economic Mobility Corps
“CDFI credit unions are often the institutions stepping in where traditional financial services have stepped away, providing affordable credit, financial counseling, support for veteran-owned businesses and investments that strengthen local economies,” Stverak said. “Congress should reject this proposal and preserve the full statutory mission and funding of the CDFI Fund.”
Recommendations Made
DCUC recommended that lawmakers:
- Preserve at least $324 million in annual funding for the CDFI Fund and maintain its full statutory program portfolio.
- Require Treasury to provide program-by-program execution timelines and quarterly reports on application volume, award-cycle times, obligations, disbursements and payment timing.
- Direct Treasury to streamline duplicative application requirements and expand technical assistance for smaller CDFI credit unions.
- Require Treasury to report on how CDFI resources are reaching servicemembers, veterans and communities surrounding military installations.
‘Funding Alone is Not Enough’
Hernandez said maintaining funding levels alone would not be sufficient without improved oversight and administration of the programs.
“Funding alone is not enough. Treasury must also ensure that CDFI resources reach communities efficiently and predictably,” Hernandez said. “Delayed awards, administrative bottlenecks and unnecessary compliance burdens can undermine the very purpose of the program.”
