WASHINGTON, DC (December 4, 2025) |
The Defense Credit Union Council, DCUC, immediately wrote to Senator Elizabeth Warren in response to her December 2 correspondence regarding overdraft fees at credit unions. In the letter, DCUC Chief Advocacy Officer Jason Stverak reminded the critical differences between credit unions and large for-profit banks, emphasizing the member-owned, not-for-profit structure that drives consumer-friendly policies across the industry.
“We share your concern that too many households live on the financial edge,” Stverak wrote. “Credit unions remain true to their mission of serving people of modest means.”
Stverak continued, adding, “In that spirit, I welcome the opportunity to address the issues you raised and to clarify how credit unions approach overdraft programs in practice.”
DCUC’s letter provided several key points:
- Credit unions’ overdraft services are voluntary, transparent, and member-centric. Overdraft protection often serves as a critical short-term safety net, especially for military families who face frequent relocations, deployment-related disruptions, and unpredictable pay schedules.
- Strong consumer safeguards are already in place. Many credit unions cap fees, require opt-in consent, offer real-time alerts, set repayment timeframes, and provide financial counseling to help break cycles of repeat overdrafts.
- Industry practices show a major decline in overdraft revenues. Stverak cites national data showing a sharp drop in overdraft and NSF fee income across both banks and credit unions, reflecting years of reform and competition that benefit consumers.
DCUC also raised concerns about one-size-fits-all mandates, explaining that proposals like a $5 fee cap fail to account for the cost of providing overdraft protection, potentially forcing institutions to eliminate the service, leaving consumers with more harmful alternatives such as declined transactions, late-payment penalties, or predatory lenders.
“Credit union overdraft programs are markedly different from the predatory practices sometimes associated with big banks,” Stverak reminds. “Our programs are designed to protect members, not to trap them.”
DCUC reaffirmed its commitment to transparency, collaboration, and continuous improvement.
“We are hopeful of a renewed dialogue with Senator Warren to explore practical, consumer-focused solutions such as enhanced disclosures, financial education, and innovative tools to reduce reliance on overdraft services,” says Stverak. “Credit unions have a strong track record of working collaboratively with lawmakers and regulators to protect consumers…we believe credit unions are a vital part of the solution, and as we stated in the letter, collaboration is what will yield the best outcomes for the people we all serve.”