DCUC Urges Foster to Protect Small Credit Unions in Regulatory Modernization Effort

By DCUC Staff — November 5, 2026

WASHINGTON, D.C. -- The Defense Credit Union Council (DCUC) is urging Rep. Bill Foster (D-IL) to ensure that efforts to modernize financial oversight deliver measurable benefits for credit unions, particularly smaller institutions, while avoiding needless regulatory burdens.

In a letter from Chief Advocacy Officer Jason Stverak, DCUC thanks Foster for accepting its recommendation, raised in previous letters, to study these issues. The Council reserves judgment on the Real-Time Regulatory Study Act of 2026 pending further review and member input and offers to work with his office to protect small credit unions from needless burdens. “We thank Congressman Foster for accepting DCUC’s recommendation, raised in our previous letters, to study these issues,” said Stverak. “We welcome his willingness to consider our input and will work with his office to protect small credit unions from needless regulatory burdens.” Foster’s discussion draft would direct the Federal Reserve, coordinating with other regulators, to develop and test open-source demonstration software to explore improvements in regulatory reporting, risk management, liquidity access, and other financial functions. DCUC’s letter acknowledges the draft’s protections against mandatory software adoption and examination or supervisory consequences for participating or declining to participate in development and testing. It also recognizes the restrictions to test environments using synthetic or legally permitted historical data. DCUC urges that these safeguards remain central as the discussion proceeds. “For defense credit unions, regulatory costs have a direct connection to member service,” said Anthony Hernandez, DCUC President and CEO. “Unnecessary expenses leave fewer resources for affordable loans, financial counseling, and support during deployments and relocations. We welcome a constructive discussion about modernization that strengthens financial protection and preserves credit unions’ capacity to serve service members, veterans, and their families.” The letter emphasizes that open-source software can still involve expenses for connecting existing systems, preparing and validating data, cybersecurity, vendor services, staff training, and maintenance. DCUC welcomes the draft’s requirement to examine costs and potential savings and urges realistic analysis of the resources available to small credit unions. “Faster reporting alone does not establish that compliance has become more efficient,” Stverak added. “We want meaningful savings and clear protections against duplicative reporting or informal pressure to replace systems that already work.” The letter builds on DCUC’s April 28, 2025, correspondence to Foster and Rep. Andy Barr, its June 2026 comments on anti-money-laundering modernization, and its September 2026 recommendations to simplify Bank Secrecy Act reporting. Across those efforts, DCUC has called for oversight tailored to institutional size, complexity, and risk.

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Originally reported by DCUC.