WASHINGTON—The Defense Credit Union Council is pressing Congress to ensure credit unions are not left behind as lawmakers advance legislation tied to artificial intelligence, fraud prevention and digital assets, warning that banks should not receive clearer authority to innovate than federally insured credit unions.
In separate comment letters submitted Wednesday to the House Financial Services Committee and Senate Banking Committee ahead of key markups and legislative discussions, DCUC called for stronger fraud prevention tools, expanded access to responsible AI technologies and explicit regulatory parity for credit unions in any final digital asset framework. The trade group said smaller and mission-driven institutions need “right-sized” compliance standards and operational clarity as lawmakers reshape financial regulation around emerging technologies.
DCUC submitted its letter to the House Financial Services Committee (HFSC) outlining support for several measures focused on fraud prevention, artificial intelligence, and financial regulatory modernization.
In the letter, DCUC called for the Committee’s shared support on strengthening fraud prevention and recovery tools, encouraging responsible adoption of emerging technologies, and ensuring right-sized regulation for credit unions serving communities nationwide.
Among these measures, DCUC proposed strengthening protections against AI-enabled fraud, improving elder fraud investigations and scam recovery efforts, modernizing supervisory technology, and expanding community financial institutions’ access to responsible AI innovation tools.
“Of all the measures scheduled for markup, this legislation most directly reflects the practical needs we have highlighted in recent hearings and letters: better fraud-detection tools, community-scaled access to emerging technologies, safe-harbor concepts for responsible fraud prevention, shared or consortium approaches for smaller institutions, and stronger public-private information sharing,” said Jason Stverak, DCUC chief advocacy officer.
DCUC also urged lawmakers to ensure that future regulatory frameworks preserve strong consumer protections while recognizing the operational realities facing smaller and mission-driven financial institutions.
“These proposals recognize that innovation and consumer protection are not mutually exclusive,” said DCUC President/CEO Anthony Hernandez, ret. U.S. Air Force colonel. “Defense credit unions need the ability to responsibly adopt emerging technologies while continuing to safeguard servicemembers, veterans, and military families from increasingly sophisticated fraud threats.”
DCUC further encouraged Congress and regulators to incorporate military- and veteran-specific fraud trends into future studies, reporting requirements, and interagency coordination efforts.
DCUC Calls For Credit Union Parity In Final Digital Asset Legislation
Separately, DCUC engaged the Senate Committee on Banking, Housing, and Urban Affairs expressing support for the Committee’s efforts to establish a balanced digital asset market structure framework while urging targeted refinements to ensure federally insured credit unions are fully included on equal footing with banks.
DCUC, which represents defense credit unions serving more than 40 million members worldwide, commended the legislation’s focus on responsible innovation, consumer protection, anti-money laundering safeguards, and operational integrity across the evolving digital asset marketplace.
The trade group expressed support for Section 401, which would provide long-needed statutory clarity allowing federal credit unions to utilize digital assets and distributed ledger technology in activities already authorized under the Federal Credit Union Act.
“If Congress gives credit unions a clear, workable, and fair pathway into digital-asset services, millions of Americans will be able to access these services through institutions that are trusted, member-owned, and deeply invested in financial education and fraud prevention,” wrote Stverak.
DCUC also urged lawmakers to strengthen the bill by explicitly including NCUA wherever federal prudential regulators are referenced and ensuring federally insured credit unions and credit union service organizations receive the same operational clarity afforded to banks and their affiliates.
“Credit unions should not be left navigating regulatory uncertainty while banks receive clear statutory authority to innovate,” said Hernandez. “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.”
Additionally, DCUC encouraged Congress to adopt tiered compliance standards and safe harbors reflecting institutional size, complexity, and actual risk exposure, warning that a one-size-fits-all approach could disproportionately burden smaller and mission-driven financial institutions.
“We’re calling for stronger parity regarding payment rails, custody treatment, stablecoin protections, and digital infrastructure access to ensure credit unions are not placed at a competitive disadvantage as financial technologies evolve,” added Stverak.
DCUC expressed its commitment to working collaboratively with lawmakers and regulators to advance policies that strengthen financial readiness, consumer protection, and innovation within the regulated financial system.