WASHINGTON, D.C (May 12, 2025) |
The Defense Credit Union Council (DCUC) has sent a letter to Texas State Senator Tan Parker to express strong opposition to Senate Bill 2056, introduced by Senator Kelly Hancock, along with its proposed floor amendment.
Representing credit unions that serve military and veteran communities nationwide—including those serving on or near Texas military installations—DCUC stressed the harmful implications this legislation could have on service members, their families, and the credit unions dedicated to supporting them.
While DCUC appreciates Senator Hancock’s efforts to address stakeholder concerns through a revised floor amendment, DCUC remains deeply concerned about the bill’s direction. Even in its amended form, DCUC expressed SB 2056 reflects a fundamental misunderstanding of the credit card transaction process and could result in substantial, unintended consequences for smaller financial institutions.
As currently drafted, the proposed amendment would require credit card issuers or networks to disclose specific swipe fee data to merchants. However, in practice, this information is typically provided by the merchant’s acquiring bank or payment processor—not the card issuer or network. SB 2056 fails to assign responsibility to these acquirers, creating both ambiguity and compliance burdens for institutions not equipped to meet the bill’s requirements.
By applying mandates based solely on issuer size, DCUC explained the bill inadvertently extends its reach to community-based credit unions involved in merchant acquiring activities— contradicting its stated intent to exempt smaller institutions. DCUC also shared that SB 2056 introduces state-specific mandates in an area governed by uniform national standards, increasing compliance complexity and risk across the payments ecosystem.
DCUC voiced its concern about the lack of public input on the bill’s latest version; while stakeholders had an opportunity to comment on the original legislation during the Senate Business & Commerce Committee hearing, the proposed amendment was introduced without the same level of transparency or stakeholder engagement. DCUC noted that bypassing the normal committee process for substantive policy changes only increases the risk of negative and/or unforeseen outcomes.
From the defense credit union perspective, the stakes are especially high. Defense credit unions are mission-driven, not-for-profit institutions focused on delivering tailored financial services to military personnel and their families. These institutions operate branches on or near military bases, offer zero-interest emergency loans, deliver financial literacy programs, and invest in digital tools that ensure members can securely access their finances—whether stationed at home or deployed overseas.
Unlike for-profit entities, credit unions reinvest interchange income to benefit their members, often operating at or near break-even to ensure access to essential services on base and in remote locations. Restricting this revenue would directly impact the availability of affordable financial services, educational resources, and secure digital banking options for military families.
If SB 2056 were enacted, defense credit unions may be forced to reduce services, cut branch hours, or eliminate free programs—placing greater strain on service members and potentially driving them toward high-cost, predatory alternatives. For a population already facing unique financial challenges, DCUC respectfully urges Texas lawmakers to reject SB 2056 and its proposed floor amendment.
“We stand ready to work collaboratively with legislators to explore alternative approaches that protect both consumers and community-based financial institutions without jeopardizing the financial well-being of our nation’s service members,” said Jason Stverak, DCUC Chief Advocacy Officer.
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.