WASHINGTON—Monday the Defense Credit Union Council sent a letter to House and Senate leadership ahead of the Independent Community Bankers of America’s Washington Summit, urging congressional leaders to reject sweeping policy proposals targeting the credit union charter, tax status, and service model.
In the letter, DCUC said it grounded its position in federal statute, regulatory interpretation, and the most recent data from NCUA, sharing that federally insured credit unions serve 144.7 million members nationwide, maintaining a strong 11.26% net-worth ratio, with 2,390 low-income-designated institutions. DCUC noted that these numbers represent a majority of the system that expands access to grants, supplemental capital, and member business lending flexibility.
DCUC also highlighted that credit unions serving military communities alone serve more than 40 million member-owners and manage over $525 billion in assets, operating under a statutory mandate to meet the financial needs of servicemembers, veterans, and their families.
“Congress has long recognized in statute that credit unions are member-owned, democratically governed, not-for-profit cooperatives designed to meet the credit and savings needs of consumers—especially those of modest means,” said Jason Stverak, DCUC chief advocacy officer. “Proposals to impose charter-wide tax changes or arbitrary asset thresholds are inconsistent with that legal framework and risk undermining institutions that deliver measurable consumer benefit.”
The letter directly rebuts recent ICBA claims on three principal policy fronts:
- Tax Treatment: DCUC reiterated that federal tax exemption is grounded in law, including the Credit Union Membership Access Act and Section 501(c)(1) of the Internal Revenue Code, and does not vary by asset size. NCUA and IRS interpretations affirm that credit unions’ not-for-profit, cooperative structure—not scale—determines their tax status.
- Bank Acquisition Transparency: Citing NCUA’s formal memorandum to Congress, DCUC noted that credit union acquisitions of banks are explicitly authorized, subject to arm’s-length negotiation, and reviewed against rigorous legal, valuation, and safety-and-soundness standards; also confirms coordination with the FDIC and state regulators to ensure continuity of deposit insurance. DCUC maintains that any congressional interest in this area should be limited to transaction-level disclosure enhancements, not charter-wide restrictions.
- Supervision and Accountability: DCUC shared that credit unions operate under a distinct statutory and regulatory framework, separate from bank-specific regimes such as the Community Reinvestment Act (CRA). NCUA’s risk-based supervision, enforcement authority, and consumer complaint processes demonstrate active oversight tailored to the cooperative model.
DCUC also pointed to NCUA data showing credit unions consistently deliver lower average loan rates and higher savings yields than banks across key products, reinforcing their role in promoting consumer access and affordability.
“Congress can insist on accountability without undermining a cooperative model that federal law deliberately recognized that federal regulators continue to supervise, and that millions of Americans continue to choose because it delivers better rates, lower costs, and mission-focused service,” wrote Stverak.
DCUC advised that policy changes to credit union taxation would have direct, material consequences for military and veteran communities, especially in instances where emergency relief measures, including zero-percent loans, fee waivers, payment deferrals, and financial counseling are needed.
“Any specific concerns brought into question can and should be addressed through targeted, proportional oversight,” said Anthony Hernandez, DCUC president/CEO. “Broad, charter-wide policy changes would impose real costs on communities across America, without a corresponding policy justification in the statutory or supervisory record. We’re asking Congress to preserve the existing legal and regulatory framework governing credit unions, reject proposals for sweeping tax changes, and focus instead on evidence-based, narrowly tailored oversight that protects consumers while maintaining the integrity of the cooperative financial system.”