WASHINGTON--The Defense Credit Union Council is urging the Senate Banking Committee to strengthen the Digital Asset Market Clarity Act before final passage, arguing the legislation should give credit unions explicit authority to offer digital asset services while closing what it said are regulatory gaps that could disadvantage the industry and leave military families more vulnerable to fraud.
DCUC submitted comments and recommendations to the Committee Tuesday.
Anthony Hernandez
"Financial readiness is inseparable from mission readiness. Service members and defense personnel are frequently targeted by digital-asset scams and aggressive offshore platforms. A safe, clear, and technology-neutral federal framework allows trusted credit unions to pair responsible innovation with robust fraud intervention and human support,” said DCUC President and CEO Anthony Hernandez, ret. U.S. Air Force colonel.
DCUC commended Section 401 of the Senate substitute, which authorizes federal and state-chartered credit unions to use digital assets and distributed-ledger systems for permissible financial services (including custody, payments, lending facilitation, and node operation).
In its comments, DCUC urged the Committee to address several critical gaps before final passage:
- Preserve and Future-Proof Section 401: Ensure statutory authority remains technology-neutral and explicit, clarifying that credit unions do not need secondary bank or broker-dealer charters to utilize distributed-ledger technology for authorized activities.
- Extend Authority to CUSOs and Partners: Grant credit union service organizations, subsidiaries, and shared-service platforms explicit legal authority under Section 401. Small and mid-sized credit unions rely on cooperative networks to achieve scale, safety, and operational capacity.
- Ensure System-Wide Regulatory Parity: Include the National Credit Union Administration and state credit union supervisors in all joint rulemakings, consultations, and supervisory mandates alongside the Fed, OCC, and FDIC.
- Protect Shares and Restrict Yield Evasion: Tighten prohibitions on payment-stablecoin interest to prevent platforms from disguising passive yield as "activity-based" rewards. Include explicit statutory language protecting credit union share accounts and dividend structures from synthetic deposit substitutes.
- Protect Overseas Military Personnel: Clarify that military members, civilian defense staff, and dependents stationed abroad retain their status as "U.S. persons" and "restricted recipients," keeping them protected under U.S. stablecoin safeguards.
-
Provide Workable Custody, Capital, and Insolvency Rules: Clarify that customer-owned digital assets held in custody remain member property, are excluded from credit union balance-sheet capital charges, and are protected under NCUA liquidation frameworks.
Jason Stverak
- Allow Realistic Implementation Timelines: Implement proportionate, risk-tailored compliance requirements and extend the effective transition period from 60 days to 18–24 months following final rulemaking.
- Guarantee Equal Access to Infrastructure: Ensure credit unions receive non-discriminatory access to digital settlement rails, open the Micro-Innovation Sandbox to credit union pilots based on project size rather than institution size, and reserve representation for credit unions on the Joint Advisory Committee on Digital Assets.
"Regulatory parity is not a request for preferential treatment," said Jason Stverak, DCUC chief advocacy officer. "When a member-owned credit union performs the same function, manages the same risk, and meets the same high regulatory standard as a bank, it must receive equivalent authority and access under the law."