By Jason Stverak
If Congress is serious about expanding financial access, it should modernize credit union field-of-membership (FOM) rules. An outdated federal framework still limits who many credit unions can serve, even when those institutions are ready to step into communities that traditional banks have left behind.
The need is not theoretical. The Federal Reserve Bank of Atlanta reported that the rate of bank branch closures doubled after 2020 and that 12.3 million people were living in banking deserts in 2023. From 2019 to 2023, the number of branches fell 5.6% overall. The FDIC’s latest national survey also found that 4.2% of U.S. households, about 5.6 million households, were unbanked in 2023, while 14.2%, about 19 million households, were underbanked. In too many rural communities and underserved neighborhoods, access to safe, affordable financial services is basic economic infrastructure.
For military families and veterans, the stakes are even higher. In a previous support letter, DCUC emphasized that many military communities are located in towns and rural areas scattered across the country, and that too many unbanked or underbanked veterans still need better access to the financial system. That letter also pointed out that the Veterans Administration still relies in part on paper checks and prepaid debit cards, tools that can be lost and that do not offer the same stability as a full banking relationship. Congress should not force these communities to wait for service when mission-driven credit unions are ready to provide it.
Straightforward Policy
The policy case is straightforward. The National Credit Union Administration explains that a credit union’s field of membership determines who is eligible to join and access financial products and services, and the Federal Credit Union Act says one of the purposes of federal credit unions is to serve the productive and provident credit needs of individuals of modest means. NCUA has also said that underserved-area expansion has already enabled millions of consumers to gain access to affordable financial services. But America’s Credit Unions has been explicit that legislation is still necessary to relax statutory limitations and allow all credit unions to add underserved areas to their FOM. Regulatory streamlining helps, but Congress must address the statutory barrier if it wants a durable national solution.
There are clear positives to doing so. FOM expansion would increase consumer choice, strengthen local competition, and give more families access to lower-cost loans, safe deposit accounts, and financial counseling. It would also help new and smaller credit unions grow into viable community institutions. In a 2025 letter to the House Financial Services Committee, DCUC warned that restrictive field-of-membership rules can hamstring de novo credit unions and make it harder for new entrants to compete. Broadening eligibility is not deregulation without guardrails: NCUA already requires detailed business plans showing how a credit union will serve an underserved area, what products it will offer, how it will reach people of modest means, and how it will maintain service in the community. Maxine Waters’ bill adds another layer of oversight for larger credit unions seeking to serve banking deserts.
Predictably, banker groups object whenever credit unions seek to expand. But banks fearing competition is not a valid reason to deny consumers more options. If a bank chooses to close branches, consolidate, or avoid harder-to-serve markets, public policy should not lock those communities out of alternative providers. That is their prerogative. Congress, however, is supposed to serve the public interest, not protect incumbents from competition.
Practical Financial Tools
Lawmakers could begin with a legislative approach that would allow all federal credit unions to add underserved areas, exempt certain business loans in low-income areas from the member business lending cap, and expand the definition of a low-income credit union to include areas more than 10 miles from the nearest branch of a financial institution. DCUC supports those ideas because they would direct more credit and more practical financial tools into communities that have been overlooked for too long.
Congress says it wants more competition, more financial inclusion, and stronger community lenders. FOM expansion is one of the clearest ways to deliver all three. This is not a loophole. It is a modernization of outdated law so credit unions can do what they were created to do: serve people of modest means, especially where the market has failed to do so. Congress should pass field-of-membership expansion legislation and let credit unions bring affordable financial services to the people and places that need them most.
Jason Stverak is Chief Advocacy Officer at the Defense Credit Union Council.