When a servicemember gets deployed overseas or a military family moves across the country for the third time in five years, their financial life becomes a prime target for scammers. And right now, the rules designed to protect them aren’t keeping pace with the threats they face.
The Defense Credit Union Council (DCUC) just sent four strongly-worded letters to congressional leaders, and the message is clear—it’s time to modernize how we protect military families from fraud while making sure the credit unions serving them can actually do their jobs effectively.
What’s Actually Happening Here
DCUC fired off these letters ahead of major congressional hearings on both the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve. Think of it as a coordinated effort to make sure lawmakers understand what military families actually need, rather than applying generic, one-size-fits-all rules that sound good in theory but fall apart in practice.
The letters went to the heavy hitters: the Senate Banking Committee and the House Financial Services Committee. Two focus on the CFPB and its upcoming reform discussions, while the other two tackle Federal Reserve policies around everything from monetary policy to payment system modernization.
“Consumer protection is strongest when it is targeted, transparent, and grounded in the real-world needs of consumers,” said Jason Stverak, DCUC’s Chief Advocacy Officer. Translation: stop creating rules in a vacuum and start paying attention to how military families actually live.
Why Defense Credit Unions Are Different
Here’s the thing most people don’t realize—defense credit unions aren’t your typical financial institutions. They’re operating on military bases around the world, serving families during deployments, government shutdowns, natural disasters, and the chaos of permanent change-of-station moves (military-speak for “pack up your entire life and relocate across the globe”).
These credit unions are member-owned, not-for-profit organizations that exist specifically to serve servicemembers, veterans, DOD personnel, and their families. They’re not chasing quarterly earnings or answering to shareholders. Their entire mission revolves around keeping military communities financially stable.
“Financial readiness is inseparable from military readiness,” said Anthony Hernandez, DCUC’s President and CEO. And he’s absolutely right. When a military family is drowning in predatory loans or dealing with identity theft during a deployment, that’s not just a consumer protection issue—it’s a national security concern.
What DCUC Wants Congress to Fix
The CFPB letters lay out a pretty comprehensive wishlist for reform, and none of it is unreasonable. DCUC supports the Bureau’s consumer protection mission—they’re not asking to gut oversight or let bad actors run wild. What they want is smarter, more accountable regulation that doesn’t treat credit unions like they’re predatory payday lenders.
Key priorities include:
- Stronger congressional oversight and transparency in how the CFPB creates and enforces rules
- Better coordination between the CFPB and the National Credit Union Administration (NCUA) to avoid duplicative supervision
- Tailored regulations that recognize credit unions operate differently than big banks
- Clear rules established upfront, rather than credit unions finding out they violated something through an enforcement action
- Recognition of good-faith compliance efforts instead of gotcha-style supervision
- Removing vague “reputational risk” concepts that give examiners unlimited discretion
One particularly important ask: bringing back the CFPB’s Credit Union Advisory Council or creating something similar. Right now, credit unions don’t have a formal seat at the table when the Bureau is crafting policies, which means unintended consequences often don’t get caught until after rules go into effect and start limiting access to responsible financial products.
The Fraud Problem Is Getting Worse
In a separate letter to the House Oversight Subcommittee on Government Operations ahead of their fraud hearing, DCUC spelled out just how vulnerable military families are to emerging scams. We’re talking identity theft, account takeover, AI-powered fraud, synthetic identity schemes, elder exploitation, and scams specifically designed around deployment and relocation cycles.
“Defense credit unions are often the first line of defense when military and veteran families are targeted by fraudsters,” Stverak explained. “Servicemembers and veterans face unique financial risks because of deployments, frequent relocations, remote account access, and reliance on federal benefit systems.”
Defense credit unions are already doing heavy lifting on fraud prevention—member education, frontline training, suspicious transaction monitoring, partnerships with base commanders and veterans organizations. But they need better tools and more flexibility to actually stop fraud before it happens.
DCUC’s fraud-fighting recommendations include:
- Better real-time information sharing between financial institutions, federal agencies, law enforcement, and payment networks
- Modernized rules that let credit unions pause or verify suspicious transactions without violating funds-availability requirements
- Support for smaller institutions adopting advanced fraud detection technology
- Risk-based federal digital identity systems that actually protect privacy
- Targeted fraud education delivered through trusted messengers in military communities
Critically, DCUC is pushing back against broad liability shifts that would make credit unions responsible for scams that originate completely outside their control. If a criminal uses social engineering to trick someone into authorizing a payment, holding the credit union liable doesn’t stop the criminal—it just diverts resources away from actual fraud prevention.
The Federal Reserve Letters: Payments and Policy
The Federal Reserve letters tackle a different but equally important set of issues. DCUC wants Congress examining how monetary policy and elevated interest rates are hitting military families—particularly when it comes to housing costs, which are already brutal for servicemembers dealing with constant relocations and limited inventory near military installations.
Higher interest rates mean higher borrowing costs, reduced mortgage affordability, and more financial stress on families already juggling deployments and military spouse employment challenges. Nobody’s saying the Fed shouldn’t focus on price stability, but policymakers need to understand the real-world impact on the communities defense credit unions serve.
DCUC also weighed in on payment system modernization, including FedNow and other innovations. The message: keep investing in these improvements, but make sure smaller institutions can actually access and afford them. And as Congress evaluates things like interchange fees, instant payments, digital assets, and stablecoins, don’t create mandates or price controls that gut credit unions’ ability to invest in fraud prevention and cybersecurity.
“Congress should focus on improving real-time information sharing, modernizing outdated rules, supporting responsible innovation, and protecting consumers without weakening the community-based institutions already working to keep them safe,” Stverak said.
The Bottom Line
All four letters include detailed questions for the record designed to push congressional oversight toward practical outcomes rather than political theater. Topics range from CFPB governance and funding to data security, third-party liability, payment fraud, VA home loans, and how federal policy actually impacts the credit unions serving military communities.
“DCUC will continue working with Congress, the CFPB, the Federal Reserve, the NCUA, and other federal partners to ensure regulation protects consumers while preserving the ability of defense credit unions to serve those who serve our country,” Stverak said.
Defense credit unions aren’t asking for special treatment or regulatory exemptions. They’re asking for common sense—rules that recognize how they operate, coordination between agencies to avoid redundant supervision, and the flexibility to actually protect their members from evolving fraud threats.
For military families navigating an already complicated financial landscape, that seems like a pretty reasonable request.