The Defense Credit Union Council (DCUC) just handed Congress a blueprint for fixing the Consumer Financial Protection Bureau—and it’s not your typical Washington wish list.
Their message to House Financial Services Committee leaders? Reform is great, but let’s not treat credit unions like they’re the problem.
In a letter to Committee Chairman French Hill and Ranking Member Maxine Waters, DCUC weighed in on proposed reforms that would reshape how the CFPB operates. The discussion draft on the table takes aim at the Bureau’s structure, rulemaking process, supervision practices, and enforcement powers—basically, a top-to-bottom renovation.
Here’s the thing: DCUC likes the idea of making the CFPB more accountable and transparent. But they’re asking lawmakers to remember that credit unions aren’t your typical financial institutions. They’re not-for-profit cooperatives that exist to serve members, not shareholders. And defense credit unions? They’re specifically built to support military members, veterans, and their families.
“Strong consumer protection and sensible regulation are not competing objectives,” says Anthony Hernandez, DCUC President and CEO (and retired U.S. Air Force Colonel, because of course). “Credit unions have built their model around serving their members, and defense credit unions take that responsibility particularly seriously because they serve the men and women of our Armed Forces, veterans, and military families.”
Hernandez points out what should be obvious but often gets lost in regulatory shuffle: Congress can build a CFPB that goes after bad actors without burying responsible institutions in paperwork. “That balance will ultimately produce a stronger financial system and better outcomes for consumers,” he adds.
What DCUC Wants
The organization didn’t just complain—they brought specific proposals addressing all five sections of the discussion draft. Their recommendations include:
- Creating an independent Inspector General specifically for the CFPB (because accountability works both ways)
- Requiring comprehensive economic analysis before regulations hit credit unions and community financial institutions
- Beefing up small-business impact reviews
- Making the CFPB revisit its own regulations every five years—because what made sense in 2019 might not fly in 2024
DCUC also wants clearer rules around the Bureau’s “unfair, deceptive, or abusive acts or practices” authority. Translation: stop using vague language that lets regulators make it up as they go.
Know the Rules Before You Enforce Them
“Credit unions should know what the rules are before the government starts enforcing them,” says Jason Stverak, DCUC’s Chief Advocacy Officer. It’s a straightforward point that somehow needs repeating in Washington. “Enforcement should punish violations of established law. It should not be the mechanism government uses to create new law.”
Stverak argues that regulators owe institutions clear guidelines, reasonable expectations, and a predictable process. Revolutionary concept, right?
The letter also tackles penalties, pointing out that good-faith compliance should actually matter. When a credit union finds an error on its own, reports it voluntarily, makes members whole, and fixes the problem, those actions should count for something when regulators determine fines. “Civil money penalties should also be proportionate to the actual conduct and consumer harm involved,” Stverak notes.
The Bottom Line
DCUC’s ask comes down to five straightforward principles: establish clear rules before enforcement begins, make requirements fit the size and risk of the institution, stick with one primary examiner, give credit for good-faith compliance efforts, and protect consumers without cutting off access to legitimate financial services.
It’s not asking for a free pass. It’s asking for common sense—which in the world of financial regulation, might actually be the most revolutionary request of all.