WASHINGTON, DC (October 31, 2025) |
The Defense Credit Union Council, DCUC, sent a letter to Chairmen Scott and Hill and Ranking Members Warren and Waters urging congressional action to prevent lasting credit damage to servicemembers, Coast Guard personnel, and federal employees during government shutdowns.
DCUC voiced that it is fundamentally unfair for those who serve the nation or keep the government running to suffer long-term credit harm due to missed payments caused by congressional funding lapses. During the most recent shutdown, 1.3 million active-duty
servicemembers and thousands of Coast Guard members and federal employees faced pay interruptions—many of whom live paycheck to paycheck. Missed payments can trigger fees, lower credit scores, and even jeopardize security clearances.
“In the last four weeks, credit unions stepped up as ‘first financial responders,’ offering 0% furlough loans, skip-a-pay options, fee waivers, and other emergency relief. However, these voluntary measures are only temporary fixes,” Jason Stverak, DCUC Chief Advocacy Officer, explained. “What’s needed is systemic protections—not ad hoc charity—in order to effectively, and proactively, safeguard the financial security of those who serve.”
DCUC’s key recommendations to Congress include:
Enact a “Shutdown Credit Protection Act.”
Establish federal protections to prevent adverse credit reporting for missed payments caused by a shutdown. Modeled on CARES Act provisions, the law would require affected accounts to be reported as current or coded as “shutdown-related.”
Ensure Consistent Regulatory Action and Oversight.
Direct financial regulators (CFPB, Federal Reserve, NCUA, OCC, FDIC) and credit bureaus to
apply existing flexibility and prevent shutdown-related delinquencies from harming credit scores. Regulators should reissue guidance and monitor compliance during each funding lapse.
Support Guaranteed Pay and Broader Financial Protections.
Advance bipartisan legislation such as the Pay Our Troops Act and Pay Our Coast Guard Parity Act to ensure uninterrupted pay for uniformed personnel. Extend similar protections—like automatic forbearance and waived late fees—to civilian federal workers and contractors through expanded Servicemembers Civil Relief Act coverage.
Engage Industry and Nonprofits.
Collaborate with financial institutions and military family organizations to refine policies that are practical for lenders and effective for borrowers. DCUC and its member credit unions stand ready to share data and best practices from recent shutdown relief efforts.
“Credit unions will always stand by our servicemembers,” said DCUC President/CEO Anthony Hernandez, “but Congress must act to remove the threat of financial instability altogether. No American should see their credit ruined because Congress fails to fund the government.”
DCUC calls on the Senate Banking and House Financial Services Committees to work swiftly on bipartisan solutions that ensure servicemembers and public servants are never penalized for political gridlock.