DCUC Responds to Sen. Warren's Letter on Credit Card Rate Cap, Opposes Durbin-Marshall Amendments in CLARITY Act

Jason Stverak

​The Defense Credit Union Council (DCUC) has issued a letter to Senator Elizabeth Warren following her January 23 letter regarding proposals to cap credit card interest rates and expand consumer protections.
 
In its response, DCUC reaffirmed its shared commitment to protecting consumers from abusive financial practices, while strongly cautioning against a one-size-fits-all 10% interest rate cap that would restrict access to safe credit for military families, servicemembers, veterans, and lower-income borrowers.
 
Writing on behalf of the nation’s defense-focused credit unions serving more than 40 million military-affiliated members, DCUC emphasized that credit unions are fundamentally different from for-profit issuers. As member-owned, not-for-profit cooperatives, credit unions return earnings to members through lower loan rates, reduced fees, and higher savings returns, rather than maximizing profits or charging so-called “junk fees.”
 
“Credit unions’ incentives are aligned with consumer interests, not extracting profit,” DCUC Chief Advocacy Officer Jason Stverak says. “We take great pride in the trust our military and veteran member-owners place in us to provide fair, affordable financial services.”
 
While acknowledging the goal of making credit more affordable, DCUC reiterated its opposition to a blanket 10% interest rate cap, warning that such a proposal would produce serious unintended consequences. Federal credit unions already operate under a long-standing statutory interest rate cap, currently 18% for most loans, and fully comply with the Military Lending Act’s 36% cap for active-duty servicemembers. Forcing rates down to 10% would severely constrain risk-based lending and disproportionately impact young servicemembers, junior enlisted personnel, and households still building credit.
 
“A rigid federal cap would reduce access to credit by limiting credit unions’ ability to serve higher-risk borrowers,” DCUC cautions. “Many credit unions would be forced to tighten underwriting or scale back credit card and small-dollar loan programs.”
 
DCUC also warned that restricting responsible, regulated lenders does not eliminate the need for credit but instead risks driving vulnerable consumers toward predatory alternatives outside the credit union system. “Limiting mission-driven institutions’ ability to price loans according to risk does not eliminate demand; it shifts borrowers to less regulated, higher-cost sources,” the letter stated.
 
In its response, DCUC addressed additional policy recommendations outlined by Senator Warren, including credit card late fees, deferred-interest promotions, rewards transparency, compliance examinations, and consumer complaint resolution. DCUC expressed support for strong enforcement against deceptive practices and bad actors, while urging regulators to preserve flexibility for community-based institutions that already operate with consumer-first models.
 
DCUC Also Opposes Backdoor Efforts to Advance Durbin–Marshall Proposal
 
In addition to its response on interest rate caps, DCUC strongly condemned recent efforts to advance the Durbin–Marshall Credit Card Competition Act through unrelated legislative vehicles.
 
“DCUC strongly opposes any effort by Senators Dick Durbin, Roger Marshall, and Peter Welch to attach the Durbin–Marshall Credit Card Competition Act to the Senate Agriculture Committee’s digital assets market-structure markup,” DCUC states. “This proposal has nothing to do with digital asset policy and has never been considered through regular order in the Senate Banking Committee, where issues of payments, interchange, and consumer credit properly belong.”
 
DCUC warned that using digital asset legislation as a vehicle for sweeping payments reform undermines transparency and bypasses appropriate congressional scrutiny.
 
“Using a bipartisan digital assets framework as a vehicle to advance a sweeping and highly controversial overhaul of the U.S. payments system is a backdoor maneuver that undermines the integrity of the legislative process.”
 
DCUC further emphasized that government-mandated interchange changes have repeatedly failed to deliver promised benefits to consumers.
 
“DCUC has been clear and consistent: government-mandated interchange changes do not benefit consumers,” says Stverak. “The experience of prior interchange mandates shows that promised savings do not flow to cardholders, while financial institutions such as credit unions lose critical revenue used to fund fraud prevention, cybersecurity investments, rewards programs, and member services.”
 
According to DCUC, the consequences would be especially harmful for military families, young servicemembers, and veterans.
 
“For military families, young servicemembers, and veterans, the result is reduced access to safe, affordable credit and weaker protections against fraud and abuse,” DCUC warns.
 
“If adopted, the Durbin–Marshall proposal would inject uncertainty into the payments ecosystem, increase fraud risk, and weaken consumer confidence, all while delivering a windfall to large retailers at the expense of everyday Americans. Major policy changes of this magnitude should be debated transparently, on their own merits, and within the committees of jurisdiction, not attached to unrelated legislation in an effort to bypass scrutiny.”
 
DCUC urged Senate leadership to keep the digital assets markup narrowly focused and reject any attempt to fold unrelated interchange mandates into the process.
 
DCUC concluded by reiterating its readiness to work collaboratively with Congress, the Consumer Financial Protection Bureau, and other policymakers to advance targeted solutions that protect consumers without penalizing credit unions that consistently put people first.
 
“By collaborating in good faith, we can achieve strong consumer protections without sacrificing access to safe, affordable credit for military families and all Americans,” says Stverak.

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