WASHINGTON — If the credit union trade groups have had to constantly fight one issue on Capitol Hill in this Congress, it is that language and provisions favoring community banks have consistently been included in proposed legislation, while credit unions have had to scratch and claw to achieve similar parity. The reason really isn’t much of a secret.
As Jason Stverak, chief advocacy officer with the Defense Credit Union Council, observed during a call with the media, the group has “expressed our concern as we have on multiple occasions that the community bank sector seems to get section after section of significant regulatory relief and reforms, and credit unions maybe only get one or two items.”
Asked by the CU Daily why he believes that to be the case, Stverak responded, “I think it’s helpful that the chairman of the House Committee on Financial Services, Rep. French Hill (R-Ark.), is from a community banking family.”
Hill founded and served as the chairman and CEO of Delta Trust & Banking Corp. in Little Rock, Ark. He sold the institution to Simmons Bank in 2014 before running for Congress.
‘Driving the Ship’
“I think that when you are driving the ship and setting the agenda, that is very helpful,” Stverak continued. “But it does raise the question of why there continues to be such a disparity in terms of action on credit union priorities and community bank priorities. We’re thankful the committee is looking at community-based financial institutions, but we’re hoping and we’ve been pushing that they need to look at community banks and credit unions on an equal basis, because we both serve the communities that are overlooked by the Wall Street banks across this country.
“They have ears at the highest offices that are setting the agenda, but we’re going to make sure that defense credit unions and credit union voices are heard and that our issues are advanced as far as possible.”
Added DCUC President and CEO Anthony Hernandez in a statement, ““Credit unions should not be left navigating regulatory uncertainty while banks receive clear statutory authority to innovate. A truly balanced framework must preserve consumer protections while ensuring credit unions can compete fairly, responsibly, and safely in the next generation of financial services.”
DCUC Sends Letter
Relatedly, the Defense Credit Union Council is urging House lawmakers to preserve credit union modernization provisions and add additional parity reforms to a housing package moving through Congress, arguing the legislation unfairly favors community banks while overlooking credit unions’ role in serving military families and rural communities.
In a May 18 letter to House Financial Services Committee Chairman Hill and Ranking Member Maxine Waters (D-Calif.), DCUC said it supports the goals of H.R. 6644 and its efforts to expand housing supply, modernize housing programs and improve homeownership opportunities. But the group said the amended legislation remains too heavily focused on banks and should explicitly include credit union reforms.
DCUC said defense-oriented credit unions collectively serve more than 40 million members and manage more than $525 billion in assets, providing financial services to servicemembers, veterans, Department of Defense personnel and rural communities. The organization said those institutions often help military families navigate permanent changes of station, government shutdowns and other economic disruptions.
Lawmakers Urged to Preserve Section 904
The organization asked lawmakers to preserve Section 904 of the bill, which would modernize federal credit union board governance requirements by giving well-rated institutions greater flexibility in meeting schedules while maintaining monthly meetings for newly chartered and weaker-rated credit unions. DCUC said the proposal would allow credit unions to devote more resources to member services and mortgage lending without weakening safety and soundness standards.
DCUC also called for permanent reform of the Central Liquidity Facility, describing it as the credit union system’s “lender of last resort.” The group said more than 3,300 mostly smaller credit unions lost access to expanded liquidity tools after temporary pandemic-era authority expired, reducing available liquidity by nearly $10 billion.
Loan Flexibility Also Urged
In addition, DCUC urged Congress to add loan-maturity flexibility for federal credit unions, noting that many remain subject to a 15-year maturity cap on certain loans while banks face no similar restriction. The group backed legislation that would allow the National Credit Union Administration to extend general loan maturities to 20 years or longer and permit 30-year terms on all one-to-four-unit residential mortgages. DCUC said the changes would improve affordability and better accommodate military families planning long-term housing needs.
DCUC said it is not seeking to disadvantage community banks, but rather to ensure credit unions are treated equally in legislation aimed at strengthening community-based financial institutions and expanding access to housing finance.
