WASHINGTON — The Defense Credit Union Council is calling on the National Credit Union Administration to spell out what digital-asset activities credit unions can conduct under existing law, arguing that the failure of the CLARITY Act to advance in the Senate makes regulatory guidance increasingly important.
In a letter to NCUA Chairman John Crews, DCUC asked the agency to develop a consolidated digital-asset roadmap that would give credit unions and examiners clearer guidance on permissible activities, regulatory requirements and supervisory expectations.
The request follows the Senate’s Sept. 15 failure to invoke cloture on a motion to proceed to H.R. 3633, the Digital Asset Market Clarity Act. The motion failed 49-50, short of the 60 votes required.
“Credit unions need a clear understanding of what they can do today, what conditions apply, and where additional authority is needed,” DCUC President and CEO Anthony Hernandez, a retired U.S. Air Force colonel, said in a statement.
“NCUA has already established important building blocks through its digital-asset guidance and implementation of the GENIUS Act,” Hernandez added. “We believe the next step is bringing those pieces together into a practical framework credit unions can use.”
Five Basic Questions
DCUC said its proposed roadmap should answer five basic questions for credit unions considering digital-asset activities:
- Can a credit union offer a particular service directly?
- Must the activity be conducted through a permitted subsidiary, credit union service organization or independent provider?
- Is prior regulatory approval required?
- What risks must the credit union’s board address?
- What will NCUA examiners expect?
DCUC said NCUA’s existing guidance provides a foundation for such a framework, pointing to the agency’s 2021 guidance addressing relationships between federally insured credit unions and third-party digital-asset providers and its 2022 guidance on distributed-ledger technology.
The council called on NCUA to build on those policies with activity-specific guidance covering third-party services, payment and settlement activities, payment stablecoins, tokenized shares, custody-related functions and other emerging uses of distributed-ledger technology.
GENIUS Act Implementation
DCUC also urged NCUA to complete its implementation of the GENIUS Act with what the organization described as clear and proportionate standards that recognize the cooperative structure of credit unions and give them an opportunity to participate alongside similarly situated regulated financial institutions.
The council has repeatedly sought parity for credit unions as Congress and regulators develop digital-asset rules. In a Sept. 14 letter to the Senate, DCUC argued that proposed CLARITY Act language created disparities between banks and credit unions, including differences involving statutory protections for credit union shares and dividends and recognition of NCUA’s regulatory role.
DCUC said NCUA should also establish consistent expectations for credit union boards and examiners involving governance, cybersecurity, third-party oversight, consumer protection, reconciliation procedures and orderly exit plans.
The organization said the agency should clearly distinguish between legal requirements and supervisory guidance.
Military Families and Overseas Access
Because digital-asset activities can involve multiple federal and state regulators, DCUC urged NCUA to coordinate with the Treasury Department, Financial Crimes Enforcement Network, Securities and Exchange Commission, Commodity Futures Trading Commission and other agencies as new regulatory frameworks are developed.
DCUC said that coordination should ensure credit unions are appropriately considered as federal agencies establish rules governing digital assets.
The council also called for guidance addressing issues affecting military members and their families, including military addresses, remote identity verification and changes resulting from deployments, while continuing to comply with sanctions and anti-money-laundering requirements.
DCUC has previously raised concerns that digital-asset legislation could unintentionally restrict financial services for military families stationed overseas. In a Sept. 11 letter to Senate Banking Committee leaders, the council sought protections to ensure official overseas assignments do not prevent servicemembers and their families from maintaining access to otherwise lawful financial services.
In-Person Meeting Requested
DCUC said it has requested an in-person meeting with Crews and NCUA staff to discuss which digital-asset issues can be addressed under the agency’s existing authority, where additional guidance or rulemaking may be appropriate and which questions will require congressional or interagency action.
DCUC’s Sept. 17 digital-assets letter to Crews is listed among the organization’s recent regulatory correspondence.
