WASHINGTON, DC (January 22, 2026) |
Early this morning, the Defense Credit Union Council (DCUC) sent a letter expressing strong opposition to the proposed 10% interest rate cap as an amendment to any legislation considered during the House Financial Services Committee’s (HFSC) full committee markup.
In the letter, DCUC stressed that a 10% interest rate cap would be especially harmful to servicemembers, veterans, and military families who rely on credit unions for safe, affordable, and mission-critical financial services.
DCUC reminded federal credit unions operate under a longstanding statutory interest rate cap, currently 18% for most loans, and fully comply with the Military Lending Act’s cap for loans to active-duty servicemembers. These safeguards reflect the credit union mission to put people over profits and ensure lending practices remain fair, responsible, and focused on member well-being.
DCUC Chief Advocacy Officer Jason Stverak highlighted the real-world implications for financial readiness and stability, sharing that credit unions routinely provide small-dollar loans, emergency credit, and short-term financial relief to help military families manage unexpected expenses, deployments, and financial disruptions. Under an arbitrary 10% cap, many of these programs could become unsustainable.
“Military families deserve policies that strengthen their financial security – not well-meant policies that inadvertently jeopardize it by shutting down access to trusted, affordable credit. Limiting credit unions’ ability to serve servicemembers in the field of consumer credit would directly undermine military financial readiness, as troops distracted by personal financial crises cannot fully focus on their missions,” DCUC wrote.
Stverak also warned that restricting responsible, regulated lenders does not eliminate the need for credit but instead risks driving vulnerable borrowers toward predatory alternatives. If credit unions are constrained by an artificially low cap, servicemembers and lower-income families may be pushed toward payday lenders, pawnshops, or unregulated online lenders that evade rate limits and consumer protections. Research cited in DCUC’s letter reaffirms that jurisdictions with very low usury caps often experience reduced access to mainstream credit and increased reliance on higher-cost, riskier financial products.
Beyond lending, DCUC stressed that interest rate caps threaten the broader ecosystem of member services credit unions provide, including financial counseling, fraud protection, budgeting assistance, and financial education programs tailored to military families. These services are essential components of financial readiness and resilience encouraged by Congress and the Department of Defense. A sweeping cap could unintentionally undercut these critical support systems.
“The problem facing military consumers is not credit unions, it is the bad actors who operate outside the confines of federal consumer protection laws,” DCUC wrote.
DCUC called for targeted, thoughtful solutions, including stronger enforcement against predatory lenders, expanded financial education, and support for innovative low-cost credit alternatives.