WASHINGTON, DC (July 14, 2026) |
The Defense Credit Union Council today sent a letter to Senate Committee on Homeland Security and Governmental Affairs Chairman Rand Paul and Ranking Member Gary C. Peters ahead of the Committee’s July 15 hearing, “Exposing Fraud in America.”
In its statement for the hearing record, DCUC emphasized the extensive work defense credit unions undertake every day to protect servicemembers, veterans, military retirees, Department of Defense civilian employees, and military families from identity theft, account takeover, payment fraud, imposter scams, benefit redirection, elder financial exploitation, and increasingly sophisticated artificial intelligence-enabled schemes.
“Defense credit unions confront fraud in real time, often before a member realizes a criminal is attempting to steal their money,” said Jason Stverak, DCUC Chief Advocacy Officer. “They combine sophisticated analytics, identity controls, and transaction monitoring with something technology alone cannot provide: a trusted employee who can recognize coercion, impersonation, or unusual behavior and take action to protect the member. Congress should build on that capability by improving two-way fraud intelligence sharing, modernizing outdated payment rules, and giving credit unions reasonable tools to intervene before losses become irreversible.”
DCUC’s letter details how credit unions use layered, real-time safeguards, including multifactor and enhanced authentication, device and behavioral analytics, transaction monitoring, card controls, check and remote-deposit screening, document verification, loan-application analytics, and member alerts. Fraud teams continually adjust these systems as criminal tactics evolve.
The letter also underscores the importance of human intervention. Credit union employees are trained to identify signs of social engineering, account takeover, forged documents, elder exploitation, suspicious withdrawals, high-risk transfers, and situations in which a member may be receiving instructions from a criminal. Call-back procedures, trusted-contact protocols, enhanced verification, and appropriately tailored transaction holds can stop a fraudulent transfer before a member’s savings are lost.
“Fraud against a servicemember, veteran, or military family is not simply a financial inconvenience, it can undermine household stability, financial readiness, and long-term security,” said Anthony Hernandez, DCUC President and CEO. “Defense credit unions have invested heavily in cybersecurity, member education, human intervention, and recovery assistance because protecting members is fundamental to their mission. A durable national fraud strategy must include credit unions at the table, hold every participant in the fraud ecosystem accountable for the risks it controls, and preserve the resources community institutions need to keep their members safe.”
Defense credit unions also provide financial education workshops, individual counseling, scam alerts, digital-security guidance, and outreach through branches and online channels. They partner with military installation leaders, the Department of Veterans Affairs, veterans service organizations, Adult Protective Services, law enforcement agencies, and community organizations to warn military-connected consumers about emerging schemes before criminals succeed.
When fraud does occur, credit unions help contain and repair the damage. Their teams work to freeze or recall funds when possible, secure compromised accounts, replace cards and credentials, preserve records, file required reports, coordinate with law enforcement, address identity theft and credit-reporting problems, and restore members’ safe access to financial services.
In its letter, DCUC urged Congress to pursue a coordinated fraud-prevention framework that:
- Establishes stronger, two-way, real-time fraud information sharing among federal agencies, law enforcement, financial institutions, payment networks, telecommunications providers, and online platforms.
- Expands appropriate safe-harbor protections for privacy-conscious sharing of fraud indicators, synthetic identity signals, mule-account patterns, benefit-redirection schemes, and emerging scam typologies.
- Modernizes federal identity-proofing and account-change controls, particularly for changes to benefit payments, direct-deposit instructions, contact information, and account credentials.
- Gives credit unions reasonable authority to pause or further verify suspicious transactions when objective indicators suggest that a consumer is being coerced or deceived.
- Improves rapid fund-freezing, recall, tracing, and recovery procedures before stolen funds are dispersed through multiple accounts or converted into other assets.
- Helps smaller and community-based credit unions adopt advanced fraud-detection, document-verification, device-analytics, and secure information-sharing technology.
- Creates a coordinated fraud-prevention campaign tailored to servicemembers, veterans, retirees, caregivers, and military families.
- Aligns liability with the conduct of and degree of control exercised by each participant in the fraud ecosystem, rather than automatically shifting losses to credit unions for scams originating on external platforms, telecommunications networks, online marketplaces, or compromised government systems.
DCUC cautioned that policies diverting credit union resources away from fraud detection, cybersecurity, secure payment systems, and member support could ultimately make consumers less safe. The Council urged policymakers to reinforce the institutions already preventing losses while ensuring that government agencies, technology platforms, telecommunications providers, payment networks, and financial institutions work together to identify and stop fraud.
“Fraud is no longer confined to a single account, institution, platform, or communications channel,” Stverak added. “Criminal networks exploit gaps between systems and move stolen funds quickly. Stopping them requires actionable intelligence, clearly assigned responsibility, modern recovery tools, and close coordination among the public and private sectors.”