The Defense Credit Union Council (DCUC) just weighed in on a pretty significant piece of regulatory action—and their message is clear: they’re on board with the new stablecoin rules, but let’s not make this harder than it needs to be.
Here’s the deal. A coalition of financial regulators—FinCEN, the OCC, the Federal Reserve, the FDIC, and the NCUA—recently dropped a joint proposed rulemaking to put some meat on the bones of the GENIUS Act. (Yes, that’s really what it’s called: the Guiding and Establishing National Innovation for U.S. Stablecoins Act. Someone in Congress was clearly feeling creative that day.)
The proposed rules would treat permitted payment stablecoin issuers (PPSIs, for short) as full-fledged financial institutions under the Bank Secrecy Act. That means they’d need to follow customer identification program (CIP) requirements—basically, know-your-customer rules designed to keep money laundering, terrorist financing, and other shady activities out of the system.
DCUC’s Take: Good Framework, But Let’s Talk Details
In their official comments, DCUC gave the framework a thumbs up overall. They agree that stablecoin issuers should play by the same anti-money laundering rules as everyone else. Makes sense—if you’re moving money around, regulators want to know you’re keeping the bad guys out.
But here’s where it gets interesting. DCUC is pushing hard for the final rules to be “risk-based, operationally workable, and appropriately tailored.” Translation: don’t make credit unions jump through hoops they’ve already jumped through. These institutions already face comprehensive federal and state BSA and AML requirements. Nobody wants to fill out the same forms twice just because the paperwork has a different logo at the top.
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DCUC didn’t just show up to say “looks good” and leave. They came with specific suggestions:
Make It Crystal Clear That Credit Unions Are Excluded
The proposed rules exclude regulated financial institutions from being treated as “customers” under PPSI CIP requirements. DCUC wants the agencies to explicitly confirm this covers both federally chartered credit unions (regulated by NCUA) and state-chartered ones (supervised by state authorities). Credit unions already maintain robust BSA/AML, CIP, and customer due diligence programs—making them go through duplicate procedures with stablecoin issuers would be regulatory overkill.
Keep CIP Standards Flexible and Risk-Based
One size definitely doesn’t fit all in financial services. DCUC supports requiring PPSIs to maintain written CIPs that match their actual operations—taking into account their size, complexity, products, services, customer base, and risk profile. A massive stablecoin operation and a smaller, specialized one shouldn’t necessarily follow identical playbooks.
Allow Enterprise-Wide Compliance Programs
If you’ve got affiliated entities under one corporate umbrella, why not let them coordinate their CIP obligations through a unified, enterprise-wide program? DCUC argues this approach cuts down on unnecessary duplication while still keeping compliance effective. Work smarter, not harder.
Let PPSIs Choose Their Verification Methods
DCUC strongly backs giving stablecoin issuers the flexibility to use risk-based approaches when verifying customer identities. Sometimes documentary evidence works best. Sometimes non-documentary methods make more sense. Often it’s a combination. Let the professionals make the call based on the actual situation.
Don’t Box Everyone Into Arbitrary Deadlines
Rather than slapping a fixed deadline on identity verification, DCUC recommends keeping the “reasonable period of time” standard. Different verification methods take different amounts of time, and individual circumstances vary. Rigid timelines might sound tidy on paper, but they can create problems in the real world.
The Bottom Line
Jason Stverak, DCUC’s Chief Advocacy Officer, wrapped up the organization’s comments with appreciation for the agencies’ work and a promise to stay engaged as things develop. It’s a diplomatic way of saying: “We’re watching, we’re participating, and we expect our input to matter.”
And honestly? DCUC’s comments reflect a pretty sensible position. Support strong safeguards against financial crime. But don’t create redundant compliance burdens that waste resources without making the system any safer. As stablecoins move from crypto-curious experiment to mainstream financial tool, getting these details right matters—not just for credit unions, but for everyone who’ll eventually use these digital dollars.