WASHINGTON—The Defense Credit Union Council has submitted a letter to the Senate Judiciary Committee outlining the unique role defense credit unions play in preventing fraud, particularly within military and veteran communities.
The letter, sent in advance of the Committee’s hearing on international scams targeting older Americans, offers specific recommendations to strengthen national efforts to combat financial exploitation.
In the letter addressed to Chairman Chuck Grassley and Ranking Member Dick Durbin, DCUC commended the Committee for its attention to the growing threat of international criminal networks that prey on older Americans—especially veterans, military retirees, and survivors receiving service-connected benefits.
“The threats this hearing will examine strike at the heart of the communities credit unions are built to defend,” wrote Jason Stverak, DCUC’s chief advocacy officer. “Defense credit unions are uniquely positioned to detect and disrupt these scams, and we are eager to partner with Congress on scalable solutions that protect these most vulnerable veterans.”
DCUC’s letter highlights the advanced anti-fraud systems, financial education efforts, and
member outreach programs credit unions operate nationwide. Credit unions are trusted financial anchors on military installations and VA campuses and are often staffed by veterans or military spouses who bring personal insight to fraud prevention efforts.
“Our members are on the front lines of financial fraud every day. We see the toll these scams take on older Americans—especially veterans who served with honor and now face a new kind of enemy online. It’s time to scale our defenses and work together on bipartisan solutions,” said Anthony Hernandez, DCUC president/CEO.”
Opposing 3.5% Excise Tax
Separately, DCUC and the Association of Military Banks of America (AMBA) Monday issued a joint letter to Senate Finance Committee leadership expressing strong concern over a proposed 3.5% excise tax on outbound remittances included in the current reconciliation package.
Both organizations requested Chairman Mike Crapo and Ranking Member Ron Wyden prioritize key amendments to protect U.S. servicemembers and their families from unintended financial harm.
DCUC and AMBA’s letter highlights how the current legislative language, while intended to deter unauthorized cross-border transfers, may inadvertently penalize lawful and essential financial support within military communities—particularly for those deployed overseas.
“Our two organizations represent the full range of regulated financial institutions that serve military families—AMBA through military-focused banks, and DCUC through defense credit unions. While we often represent different segments of the financial system, we are united in our belief that this tax, as drafted, would undermine military financial readiness and penalize lawful financial support,” the letter states.
DCUC and AMBA outlined their shared concerns, including:Impact on Military Families Abroad:
- Transfers could be automatically taxed if the provider cannot verify citizenship—even between two U.S. citizens
- Lawful permanent residents (green card holders), including military spouses and parents, would be taxed when sending funds to U.S. service members
- The refund process proposed is cumbersome, slow, and not realistic for deployed personnel.
Operational Challenges for Military-Focused Institutions:
- Lack of clarity from Treasury on verification protocols
- Unclear provider qualification standards
- Inadequate infrastructure for rapid implementation, especially for smaller, community-based institutions serving military installations
DCUC and AMBA also provided the following recommendations to the Committee:
- Exempt U.S. military personnel and their families—both as senders and recipients—from the remittance tax, regardless of provider.
- Include green card holders in the exemption when transferring funds to U.S. citizen service members.
- Delay implementation until financial institutions receive the necessary regulatory guidance and tools
- Instruct the Treasury Department to establish clear verification standards and a safe harbor for regulated institutions serving military members.