WASHINGTON--Thursday, the Defense Credit Union Council sent a letter to Senators Alex Padilla (D-CA) and Kevin Cramer (R-ND) urging the inclusion of the Central Liquidity Facility (CLF) Enhancement Act language in the upcoming Housing for the 21st Century Act as it moves to the Senate floor.
"During the pandemic, temporary CLF enhancements expanded access from just a few hundred credit unions to more than 4,000 institutions, significantly strengthening financial stability and protecting consumers. When those provisions expired, thousands of primarily small and defense-focused credit unions lost access to this vital liquidity backstop,” wrote DCUC Chief Advocacy Officer Jason Stverak. “The Senate has already demonstrated strong bipartisan support for this policy by including the CLF language in its version of the FY2026 National Defense Authorization Act. Although the provision was ultimately removed in conference, its prior passage reflects clear Senate consensus on the importance of strengthening credit union liquidity safeguards.”
Stverak noted that including the language in the Housing for the 21st Century Act presents a timely opportunity to enact the commonsense, zero-cost reform.
“Ensuring credit unions have reliable emergency liquidity directly supports housing stability, mortgage lending continuity, and financial readiness for military families and communities nationwide,” he wrote.
DCUC’s letter stressed the importance of maintaining these critical liquidity tools to protect credit unions and their members. DCUC urged Senate leadership to include the CLF Enhancement language in the final housing package, helping safeguard financial stability for communities across the nation.
Separately, DCUC sent a formal letter for the record following the U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing titled “Update from the Prudential Regulators: Rightsizing Regulation to Promote American Opportunity.”
DCUC outlined several key priorities, including:
- Preserving the Credit Union Tax Exemption: DCUC urged Congress to maintain credit unions’ longstanding tax-exempt status, emphasizing that it enables not-for-profit institutions to reinvest earnings into member benefits. Eliminating the exemption, the letter notes, would increase costs and reduce services for military families and other consumers.
- Opposing a 10% Interest Rate Cap and the Durbin–Marshall Credit Card Competition Act: DCUC expressed strong opposition to proposals such as a one-size-fits-all 10% credit card interest rate cap and the “Credit Card Competition Act.” The Council warned that an arbitrary rate cap would significantly restrict access to safe and affordable credit for servicemembers and other borrowers. It also cautioned that mandated interchange changes would reduce critical revenue used for fraud prevention, cybersecurity, and rewards programs—without guaranteeing consumer savings.
- Supporting Padilla–Cramer CLF Legislation: DCUC voiced strong support for bipartisan legislation introduced by Padilla and Cramer (S. 3575) to strengthen the NCUA’s Central Liquidity Facility. The Council praised the measure as a necessary step to enhance credit union system resiliency during periods of economic stress and encouraged swift enactment.
DCUC thanked the Committee for its leadership in examining how financial regulation can promote economic opportunity while safeguarding community-based institutions. DCUC said it also reaffirmed its commitment to serving as a resource to lawmakers and staff on issues impacting credit unions and the military and veteran communities they support.