The CLARITY Act: So Close, Yet So Far
Let’s talk about the CLARITY Act—arguably the biggest financial-services bill Congress might actually pass this year. Notice I said “might.”
The Senate Banking Committee gave it a solid bipartisan push in May with a 15–9 vote. Senate negotiators and the White House have been hammering out disputed ethics language, and a fresh Senate version dropped last week. Good news, right? Well, sort of. The problem is that supporters still haven’t proven they’ve got the 60 votes needed to actually get this thing through the Senate. And let’s be honest—substantial disagreements remain on both the political and policy fronts.
Here’s where DCUC stands: we absolutely support Congress establishing clear, durable, and responsible rules for digital assets. The current regulatory uncertainty helps exactly nobody—not consumers, not responsible financial institutions, nobody. But here’s the catch: clarity for the broader market can’t mean ambiguity for credit unions.
The final legislation needs to explicitly preserve the authority of federally insured credit unions to participate in lawful digital-asset activities under NCUA supervision. It should recognize the legitimate role of credit union service organizations, subsidiaries, and qualified third-party vendors. And it needs to establish workable standards for custody, safekeeping, payments, settlement, digital-asset-backed lending, and member-directed transactions.
We also need clear Bank Secrecy Act requirements, anti-money-laundering provisions, consumer protections, accounting standards, and cybersecurity requirements. Credit unions want strong safeguards—we’re not asking for a free pass here. What we don’t want is a regulatory framework designed primarily for the biggest banks, securities firms, and tech platforms, with credit unions treated like an afterthought once everything’s already written.
DCUC has specifically requested explicit NCUA authority, inclusion of credit union service organizations, workable custody standards, proportional compliance requirements, and equal access to digital-payment and settlement infrastructure. We’re not asking for exemptions from appropriate regulation. We’re asking for genuine regulatory parity.
This matters directly to military and veteran communities. Think about it: servicemembers frequently move between states and countries, rely heavily on digital financial services, and face elevated risks from fraud, identity theft, benefit redirection, and predatory financial products. They should be able to get responsible digital-asset services through the trusted, member-owned institutions that already understand military pay, deployments, PCS moves, overseas assignments, and veterans’ benefits.
Our message to senators this week is straightforward: pass a strong digital-asset framework, but write credit unions into the law from the beginning. Don’t make 145 million credit union members wait for regulators to fix an avoidable congressional omission later.
The FY2027 NDAA: Passed the House, Stuck in Senate Limbo
The House passed its version of the Fiscal Year 2027 National Defense Authorization Act (H.R. 8800) on July 22 by a narrow 216–212 vote. The Senate Armed Services Committee had previously advanced its version (S. 4784) by an 18–9 vote. Sounds like progress, right? Well, not exactly.
The Senate failed to invoke cloture on the motion to proceed on July 14—that vote fell short at 50–46. Last Thursday, the majority leader moved toward the NDAA again but then withdrew the motion to proceed. So the NDAA isn’t dead, but it’s definitely not moving. The next step requires a bipartisan agreement on floor consideration, amendments, and overall process.
Why does DCUC care so much about a defense bill? Because military financial services are a defense-readiness issue. Financial readiness is mission readiness. A servicemember distracted by housing instability, fraud, delayed pay, insufficient emergency savings, or an inability to obtain responsible credit cannot focus fully on the mission. It’s that simple.
Our FY2027 NDAA priorities include strengthening the NCUA Central Liquidity Facility, modernizing credit union board-meeting requirements, providing greater loan-maturity flexibility, advancing the Veterans Member Business Loan Act, improving coordination over financial institutions operating on military installations, and preserving the member-owned structure of the National Credit Union Share Insurance Fund. We’ve also urged Congress to establish a formal military financial-services advisory mechanism so that installation-level realities are considered before Washington imposes policy changes.
The Veterans Member Business Loan Act deserves special attention. Veterans frequently leave military service with the leadership, discipline, and specialized skills needed to build successful businesses. Outdated lending restrictions shouldn’t prevent credit unions from helping those veterans obtain responsible capital.
The Central Liquidity Facility is also a readiness issue. Military-serving credit unions often operate in unique markets—remote communities, overseas locations—where they can’t rely on the same liquidity channels available to the largest national institutions. A resilient credit union system needs reliable emergency liquidity before a crisis occurs, not after one begins.
DCUC will also remain vigilant against unrelated financial-services riders. The NDAA shouldn’t become a vehicle for harmful payment-card mandates, interchange restrictions, or proposals that weaken credit unions’ ability to invest in fraud prevention, cybersecurity, rewards, affordable credit, and low-cost member services.
Our position isn’t that financial-services issues can never belong in the NDAA. The appropriate test is whether a proposal strengthens the financial readiness and resilience of servicemembers, veterans, and military families. Credit union liquidity, veteran entrepreneurship, on-installation financial access, and military pay protection meet that test.
John Crews’ NCUA Nomination: Ready for a Vote
The Senate Banking Committee has reported John Crews’ nomination to the full Senate. His nomination is now Executive Calendar Number 905 for a term on the NCUA Board expiring August 2, 2031. If confirmed, he would succeed Kyle Hauptman, whose term has expired. No floor vote has been announced yet, but DCUC supports prompt Senate confirmation.
Crews brings nearly 15 years of financial-policy experience and has demonstrated an understanding of safety and soundness, effective risk-based supervision, technological innovation, de novo credit unions, smaller institutions, and maintaining an open relationship between the agency and the credit union system.
Credit unions need regulatory leadership that understands they’re not small banks. They’re member-owned cooperatives with a distinct charter, governance structure, mission, and statutory framework. Regulation should recognize differences in size, complexity, business model, and risk rather than imposing a uniform regulatory template designed around the largest institutions.
DCUC believes Crews has the policy experience and regulatory understanding necessary to help guide the agency at a consequential moment. We’re urging Senate leadership to schedule his confirmation vote before the August recess.
His confirmation would provide leadership continuity, but it wouldn’t eliminate every question surrounding NCUA governance. Congress, the administration, and the courts will continue to shape the agency’s long-term structure. In the meantime, credit unions need a regulator capable of making timely decisions, providing consistent supervision, protecting the Share Insurance Fund, and implementing major new financial laws.
NCUA: Fees, Digital Assets, and Proportionate Regulation
Beyond the Crews nomination, DCUC is tracking several immediate NCUA matters. First up is the agency’s interim final rule clarifying federal credit unions’ authority over non-interest charges and fees, including interchange revenue. The rule affirms that NCUA has exclusive authority over federally chartered credit unions in this area and that conflicting state restrictions don’t apply. The rule became effective June 30.
DCUC strongly supports this rule and has asked NCUA to finalize it without modification. A patchwork of state payment laws would create operational confusion, increase compliance costs, interfere with national payment networks, and produce different rules for members depending on where a transaction occurs. That’s especially unworkable for military families who move frequently, maintain accounts across state lines, or conduct transactions from overseas locations.
Interchange revenue isn’t an abstract line item. It helps credit unions operate secure card programs, monitor transactions, reimburse fraud losses, maintain technology, provide member support, and offer affordable accounts and rewards. Policies that indiscriminately reduce those resources can weaken the very fraud-prevention systems policymakers say they want strengthened.
Second, NCUA is implementing the GENIUS Act’s payment-stablecoin framework. The agency has proposed operational and risk-management standards for NCUA-licensed permitted payment stablecoin issuers, and federal regulators are separately developing customer-identification requirements. NCUA will be responsible for licensing, regulating, and supervising qualifying stablecoin issuers that are subsidiaries of federally insured credit unions.
DCUC supports a strong framework but will continue pressing for rules that are principles-based, coordinated with other banking regulators, proportionate to actual risk, and operationally workable. Credit unions shouldn’t face slower approvals, higher compliance costs, or narrower authorities than bank-affiliated issuers providing comparable services.
Third, we’ll continue monitoring NCUA’s broader deregulation and supervisory agenda. DCUC supports eliminating outdated, duplicative, or unsupported requirements. But deregulation must be disciplined. It should reduce unnecessary burden while maintaining safety and soundness, protecting the Share Insurance Fund, and preserving confidence in the cooperative system.
Our standard is simple: regulation should be clear, risk-based, charter-neutral, and proportionate.
Reconciliation 3.0: A Framework, Not a Final Package
The House also passed H. Con. Res. 113 last week by a vote of 216–214, beginning what’s been described as “Reconciliation 3.0.” Let’s be precise about what actually happened here.
The House passed a budget framework—not the final reconciliation legislation. Under the current resolution, four House committees must submit recommendations by September 11. The instructions permit up to $12 billion in deficit increases from the Agriculture Committee, $60 billion from Armed Services, $13 billion from the Intelligence Committee, and $10 billion from House Administration, for a total framework of $95 billion.
Here’s what’s reassuring: the current House instructions don’t direct the Ways and Means Committee or the Financial Services Committee to produce legislation. So as written today, the framework doesn’t contain a direct change to the credit union federal tax status or create a direct pathway for financial-services legislation. That’s good news, but it’s not a reason to take our eyes off the ball.
The Senate must still determine whether and how to proceed. Senate Republicans have described reconciliation as a potential backup option while the regular appropriations process continues, and significant questions remain about Senate support and compliance with the Byrd Rule.
DCUC will monitor every stage because reconciliation is a fast-track process that can change significantly between chambers. We’ll oppose any attempt to use offsets, tax provisions, or late additions that undermine the credit union tax status, impose bank-style taxation on member-owned cooperatives, or divert resources from military financial readiness.
We’ll also examine the defense provisions closely. Additional defense funding should support military personnel, readiness, housing, family stability, and the infrastructure necessary to serve those who serve. Defense spending shouldn’t be evaluated solely by the number of weapons systems purchased. The financial well-being of the people operating those systems is also a readiness concern.
Finally, the reconciliation debate is connected to the larger appropriations and government-funding picture. Defense credit unions have repeatedly demonstrated that they’ll step forward with emergency loans, paycheck advances, fee relief, mortgage assistance, and financial counseling when government funding failures interrupt military or federal pay. But credit unions shouldn’t be expected to substitute indefinitely for Congress doing its most basic job: funding the government on time.
House Recess Is an Advocacy Opportunity
With House members back in their districts, credit union advocacy shouldn’t slow down. It should become more local and more tangible.
DCUC will encourage lawmakers to visit credit union branches, meet employees responsible for fraud prevention and military financial counseling, and speak directly with servicemembers, veterans, military spouses, and small-business owners.
A congressional office may view interchange, liquidity, stablecoins, or member-business lending as technical policy questions. A branch visit shows what those policies mean in practice: whether a fraudulent transaction is stopped, whether a veteran receives business capital, whether a junior enlisted family has access to an affordable emergency loan, or whether a military spouse can maintain financial continuity during another relocation.
The August district work period is our opportunity to move the credit union story beyond Washington statistics and show lawmakers the human consequences of their decisions.
Fraud and Artificial Intelligence
DCUC will also monitor Wednesday’s Senate Special Committee on Aging hearing examining deepfakes, chatbots, artificial intelligence, and senior fraud.
This issue is directly relevant to credit unions serving veterans, military retirees, caregivers, and their families. Criminals increasingly combine impersonation, artificial intelligence, compromised personal information, fraudulent payment instructions, and social engineering. It’s like they’ve got a whole toolkit of terrible.
DCUC has urged Congress to establish stronger two-way fraud-information sharing, modernize identity protections, provide appropriate safe harbors, improve fund-freezing and recovery procedures, and give credit unions reasonable authority to pause or further verify suspicious transactions when evidence suggests a member is being coerced or deceived. We’ve also emphasized that liability should reflect the conduct and control of every participant in the fraud ecosystem, including telecommunications companies, technology platforms, payment networks, online marketplaces, and government systems.
Credit unions are often the last line of defense between a criminal and a member’s life savings. Congress should strengthen that line of defense, not drain the resources necessary to maintain it.
What America’s Credit Unions Is Doing
The House is in-district for the August recess. The Senate remains in Washington, D.C., for another two weeks, focused on confirming outstanding nominations and considering a federal budget continuing resolution and “Reconciliation 3.0,” though Senate leadership remains unconvinced.
The NDAA was passed by the House prior to recess, while the Senate is working through filed amendments for its version. America’s Credit Unions called on the Senate to consider attaching bipartisan, credit union-sought legislation, including:
- CLF Enhancement Act
- AFFORD Act
- Main Street Depositor Access Act
- STREAMLINE Act
Majority Leader John Thune (R-SD) indicated the CLARITY Act could be brought to the Senate floor before the August recess, although he’s admitted that the Senate won’t be able to pass it before August. Senate Democrats and some Republicans are withholding support until changes to the bill language are made. America’s Credit Unions and all Leagues wrote to the Senate on the legislation ahead of floor consideration. Key excerpts from the letter:
“To be clear, we are supportive of the vast majority of the CLARITY Act, particularly provisions which are essential for maintaining the competitive relevance of credit unions, and believe it should become law. In this context, however, we would support Congress refining the prohibition on yield in a way that ensures credit unions can continue supplying credit to local communities while having the ability to meaningfully engage with growing digital asset markets.”
“Ideally, the CLARITY Act will integrate the world of traditional finance with an emerging digital asset sector with minimal disruption to the millions of Americans who depend on reliable access to credit through their local credit union. We agree that the goal should not be to pick winners or losers between crypto and traditional finance.”
John Crews’ nomination to the NCUA Board is expected this week as Senate Leadership has readied a nominations package combining several nominations awaiting a floor vote.
Statement from America’s Credit Unions Chief Advocacy Officer Kathleen Coulombe: “Credit unions thank Chairman Scott and the members of the Senate Banking Committee for advancing John Crews’ nomination to the NCUA board. We appreciate that the Committee recognizes a robust credit union industry requires a fully staffed NCUA Board and John Crews possesses the necessary experience and knowledge to efficiently lead the NCUA. We urge the Senate to quickly vote to confirm his nomination.”
Senate Committees are meeting to tackle concerns around AI during two important hearings relevant to credit unions:
- Wednesday: Senate Special Committee on Aging discusses AI and senior fraud
- Thursday: Senate Commerce Committee discusses how AI is impacting communications networks
We’ll continue to monitor Senate actions and provide updates.
Check Yourself: Stop Check Fraud Before It Starts
As fraud losses in the U.S. totaled at least $16 billion in 2025, America’s Credit Unions and American Association of Credit Union Leagues are supporting an America Saves campaign to raise awareness of check fraud.
The campaign launching on August 3