WASHINGTON–The Defense Credit Union Council (DCUC) has sent a trio of letters to Capitol Hill.

In letters to both the Senate Finance Committee and House Ways and Means Committee DCUC warned that eliminating the “historically-recognized credit union tax exemption would significantly harm America’s communities, including service members, veterans, and their families, raising costs, reducing financial services access, and weakening military financial readiness.”

In the letters, DCUC Chief Advocacy Officer Jason Stverak stated that, unlike banks, credit unions, by “both their unique structure and founding missions, reinvest earnings into member benefits such as lower loan rates, higher savings yields, and reduced fees.”

“Importantly, many credit unions operate on or near military installations, and continue their dedication to ensuring America’s military communities stateside and abroad have access to essential financial services,” the Defense Council said. 

DCUC said it also sought to highlight how defense credit unions provide tailored support, including emergency relief loans, financial counseling, and deployment-friendly financial solutions.

‘Day In, Day Out’

“DCUC sees day in-and-out the unwavering commitment credit unions have to their member communities, especially those who serve, or have served to defend our nation,” DCUC President and CEO Anthony Hernandez said in a statement. “These credit unions—whom we proudly consider part of the defense credit union movement—consistently share their stories of impact, actively engage in our monthly advocacy meetings, and participate in our educational conferences to deepen their dedication and abilities to best serve their members. Altering or revoking this historic tax status of credit unions would severely restrict America’s financial cooperatives from being able to meet their members’ financial needs.”

‘Effective Pay Cut’

DCUC further argued that removing the credit union tax exemption would essentially function as an effective pay cut for military families, forcing higher loan rates and leading to branch closures on bases. 

“This could push service members and their families toward high-cost alternatives, increasing financial stress and impacting both military financial readiness and retention,” the organization said. 

DCUC said it is calling upon on Congress to reaffirm its long-standing bipartisan commitment to credit unions as financial cooperatives, :ensuring America’s communities, especially those with military and veteran members, and in rural, remote, or underserved areas, continue receiving access to the financial support and resources they need.”

Letter on CFPB

Separately, DCUC expressed its opposition to the Consumer Financial Protection Bureau’s (CFPB) final rule on overdraft fees in a letter to Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-SC).

The CFPB’s new rule, issued in December 2024, applies to financial institutions with more than $10 billion in assets and mandates that these institutions either cap most overdraft fees at $5 or treat overdraft programs as credit under the Truth in Lending Act (TILA). 

In its letter, DCUC said it supports Sen. Scott’s leadership in introducing a Congressional Review Act (CRA) resolution to overturn the CFPB’s rule and commends his efforts to bring the measure before the Senate.

‘Detrimental Consequences’

“While framed as a consumer protection initiative, this rule imposes unintended and detrimental consequences on credit unions and the military communities they serve,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. “Overdraft protection is a valuable, voluntary service that helps members manage short-term cash flow gaps and avoid more costly penalties, such as bounced checks, late fees, or utility disconnections. The CFPB’s arbitrary $5 cap disregards the operational costs of providing this service and the preferences of consumers who have actively opted in for the flexibility it offers.

“Our member institutions serve military personnel and their families, many of whom face unique financial challenges due to frequent relocations, deployments, and unpredictable duty schedules,” Stverak continued. “Overdraft services often serve as an essential safety net for these members, helping ensure financial obligations are met when circumstances prevent timely account management. Removing or limiting access to overdraft protection would undermine the financial readiness of our service members and leave them more vulnerable to fees from missed payments or insufficient funds.” 

Particular Burdens

DCUC told Congress the rule also places significant compliance burdens on credit unions, particularly those committed to member service rather than profit maximization. 

“Reclassifying overdraft protection as a credit product under TILA would require costly system overhauls, additional disclosures, and extensive compliance measures—despite members having already opted in with full awareness of the terms,” DCUC stated. “This regulatory strain creates uncertainty for many credit unions, especially those nearing the $10 billion asset threshold, and threatens their ability to serve their communities effectively.”

New DCUC Member

Separately, the Defense Credit Union Council (DCUC) has added Railway Credit Union as its newest affiliate member.

“Railway Credit Union (RCU) has evolved from a small cooperative of Northern Pacific Railway employees in 1954 to a full-service financial institution serving a diverse membership,” DCUC said in a statement. Over the years, strategic mergers with Soo Line Employees Credit Union, AFL-CIO Credit Union, Mandan Railway Employees Credit Union, Bismarck Telco Federal Credit Union, and Genie-Watt Credit Union have strengthened its reach and financial services. Key milestones include acquiring corporate headquarters in Mandan in 2003 and expanding to Bismarck in 2010. 

“Most recently, RCU extended its membership to include the North Dakota Railroad Museum and military members. While not seeking to be the largest, RCU remains committed to providing world-class service and enriching its members’ financial well-being.”

‘Powerful Voice’

“We are excited to join the DCUC as they serve as a powerful voice in Washington, D.C., representing our many military members,” Railway CU President and CEO Paul Brucker said in a statement.

“We are thrilled to welcome Railway Credit Union to DCUC’s membership and the defense credit union community,” Anthony Hernandez, DCUC President/CEO, said in a statement. “We look forward to supporting their efforts in enhancing financial services for military and veteran communities. Through our advocacy and resources, we are committed to helping them strengthen their mission as a financial cooperative, making a lasting impact on the lives of their members.”