By Jason Stverak
“Passing this bill is about keeping our promise to veterans, honoring their service, and empowering them to succeed as business owners and community leaders,” the Defense Credit Union Council (DCUC) and The American Legion declared in a recent joint letter to Congress.
In an era of sharp divides, this powerful partnership between DCUC – the trade association of credit unions serving our military – and The American Legion – the nation’s largest veterans service organization – stands united in a mission to support veterans and their families. They have come together to champion H.R. 507/S. 110, the Veterans Member Business Loan Act, a bipartisan, zero-cost reform that will remove regulatory obstacles and expand access to capital for veteran-owned businesses.
Congress should heed their call. Honoring veterans means more than words; it means tearing down barriers that impede their post-service success.
‘Uncommon Alliance’
On Jan. 21, DCUC and The American Legion jointly sent a letter to Congressional leaders urging swift passage of the Veterans Member Business Loan Act. This uncommon alliance underscores how urgent and commonsense the issue is. At stake is the opportunity for those who wore our nation’s uniform to continue serving – this time as entrepreneurs generating jobs and growth in their communities. Too many veterans today face unnecessary hurdles when they seek financing to start or grow a business.
While veteran-owned firms already employ over 5.3 million Americans and generate nearly $963 billion in annual revenue, the share of U.S. businesses owned by veterans has plummeted from 11% in 2014 to just over 8% in 2020. This decline signals that thousands of capable veterans who could be creating jobs and strengthening our economy have been left on the sidelines. We must not allow those who protected our freedoms to now be denied the opportunity to pursue their own American Dream.
Outstanding Entrepreneurs, Barriers to Capital
Veterans bring discipline, leadership, and proven skills to entrepreneurship. Historically, they have been a vital part of the nation’s small business engine. Yet recent years have seen a generational decline in veteran entrepreneurship, and a key reason is lack of access to capital. Studies show veteran entrepreneurs are approved for business loans at lower rates than non-veterans and are more likely to rely on personal savings due to financing gaps.
In fact, 75% of veterans cite access to capital as a top challenge when starting or expanding a business. Simply put, veterans with solid business ideas often cannot secure the financing they need from traditional lenders. This funding shortfall forces many veterans to scale back or shelve their entrepreneurial ambitions – a loss not only for them, but for our broader economy which misses out on the jobs and innovation veteran-owned businesses could provide.
These challenges persist despite veterans’ strong qualifications as borrowers and entrepreneurs. Military service inculcates traits like strategic planning, resilience, and responsibility for team outcomes – qualities that translate directly into running a business. America should be tapping into this potential. Instead, too often veterans return home to find doors to opportunity closed.
Bitter Irony
It is a bitter irony that those who risked everything for our country struggle to get a small business loan on the home front. Removing the financial roadblocks in their path is not a handout; it is fulfilling a promise. As DCUC and The American Legion wrote, “This decline [in veteran-owned businesses] signals that thousands of capable veterans who could be creating jobs and strengthening our communities have instead been left on the sidelines”. We must act to ensure our nation’s heroes are not denied the chance to succeed in civilian life due to outdated regulations or lack of credit.
Credit Unions: A Natural Partner for Veteran Businesses
One of the most powerful solutions for closing the veteran entrepreneurship financing gap lies in America’s credit unions – particularly the network of defense credit unions with deep roots in military communities. Credit unions are not-for-profit, member-owned financial cooperatives, and many were founded specifically to serve servicemembers and veterans.
DCUC and its member credit unions don’t just talk about serving those who served – they live it. Defense credit unions operate on or near over 300 military installations worldwide, serving more than 40 million members – from active-duty personnel and DoD civilians to veterans and military families. These institutions understand the unique financial needs of military life and veteran transitions. They have a proud history of providing affordable loans, financial education, and trusted guidance to those who wear the uniform.
‘Eager & Uniquely Positioned’
Crucially, credit unions are eager and uniquely positioned to help veteran entrepreneurs. With community-based focus and no profit motive, credit unions routinely go above and beyond to lend responsibly to members others overlook. DCUC’s very mission is “to champion the interests of America’s credit unions serving our military and veteran communities”, ensuring that servicemembers, veterans, and their families have access to high-quality financial services in the finest traditions of the credit union philosophy.
In line with that mission, DCUC has been a leading advocate for expanding veteran business lending. As part of its historic commitment to veterans, DCUC was instrumental in getting the Veterans Member Business Loan Act introduced, seeing it as vital to giving veterans the resources to thrive in civilian life.
Ironically, it is a federal regulation – in place since 1998 – that is today preventing credit unions from fully serving veteran-owned businesses. An outdated federal cap limits most credit unions’ member business lending to 12.25% of their assets. This arbitrary cap, imposed decades ago, often forces credit unions to turn away qualified veteran borrowers despite the credit union’s willingness and capacity to lend. In practice, this structural barrier is choking off much-needed credit on Main Street for veteran entrepreneurs at the very moment we need all engines firing to boost our economy.
What No Veteran Should Ever Hear
No veteran should ever hear “we’ve hit our limit” when seeking a loan for a sound business plan, simply because of an artificial lending cap from a bygone era. Yet that is exactly what happens under current law. It’s a lose-lose scenario: veterans lose opportunities, and communities lose the benefits of new businesses and jobs.
Credit unions, which exist to serve their member-owners, are handcuffed by an outdated rule that treats a loan to a veteran the same as a loan to a big corporate developer. This makes no sense, especially when similar exemptions to the cap already exist for residential mortgages and agricultural loans. If we exempt a farm loan or home loan made by a credit union, why not a loan to a veteran entrepreneur who defended our nation?
A Bipartisan, Zero-Cost Solution
The Veterans Member Business Loan Act (H.R. 507/S. 110) is a straightforward reform that would remove this barrier by exempting loans to veteran-owned small businesses from the credit union business lending cap, while maintaining all safety and soundness requirements.
In plain terms, it lets credit unions do more of what they already do best – make safe, responsible loans in their communities – by using their own capital to support veteran entrepreneurs, free of an arbitrary limit. Importantly, this bill asks for no new federal program, no subsidy, and no taxpayer money. It is simply regulatory relief. It costs the government nothing – a rare opportunity to enact a policy change that is straightforward, bipartisan, and profoundly impactful without burdening the federal budget. In an age of tight budgets, finding a zero-cost initiative that can spark economic growth is like finding a unicorn.
But here it is. By unleashing credit unions to lend to veterans, we can fuel thousands of new businesses and jobs at no expense to taxpayers.
No Surprise
It’s no surprise, then, that this measure enjoys strong bipartisan support on Capitol Hill. In the Senate, S. 110 is championed by Sens. Mazie Hirono (D-HI) and Dan Sullivan (R-AK), and in the House, H.R. 507 is led by Reps. Vicente Gonzalez (D-TX) and Brian Fitzpatrick (R-PA). Each bill boasts dozens of co-sponsors from both parties. Lawmakers from across the political spectrum recognize that empowering veteran-owned businesses is not a Democratic or Republican issue – it’s an American issue.
The American Legion, with its 1.6 million members nationwide, has strongly endorsed the bill as a key step to “unlock more capital for veterans at no cost to taxpayers”. DCUC, representing over 180 defense-focused credit unions, has made this legislation a top priority, seeing it as a continuation of its six-decade mission to serve those who served us.
This uncommon alliance between a financial trade association and a venerable veterans organization speaks volumes. It shows that across different sectors; leaders agree on the solution: remove the needless cap and let credit flow to veteran entrepreneurs.
United for Veterans – Congress Must Act Now
When an issue brings together organizations as diverse as DCUC and The American Legion – and garners true bipartisan, bicameral support in Congress – it signals a policy whose time has come. The Veterans Member Business Loan Act is exactly that. After years of decline in veteran entrepreneurship, we finally have a chance to reverse the trend by simply removing a government-imposed obstacle.
As the joint DCUC-American Legion letter to Congress emphasized, every day of inaction represents lost opportunities for veterans to create jobs, strengthen communities, and continue serving the nation in civilian life. How much longer should veterans with dreams of opening a storefront, a tech startup, or a contracting business have to wait for Washington to catch up with common sense? Each delay means another business idea deferred, another team not hired, another community asset unrealized.
Congress Needs to Move
Congress should move swiftly and decisively to pass H.R. 507/S. 110. This legislation is a chance to honor our veterans not just with thanks or medals, but with meaningful opportunity. It is a chance to say to the veteran who hung up her uniform and now wants to open a small business: We have your back. The cost is zero, but the payoff will be immense – in economic growth, in job creation, and in fulfilling the promise we made to those who served.
By expanding veteran access to capital, we also strengthen America’s economy and local communities, as veteran-owned businesses tend to hire other veterans and give back to their neighborhoods.
In a very real sense, passing the Veterans Member Business Loan Act is about keeping our promise to those who kept theirs. It’s about honoring the commitment and sacrifice of veterans by empowering them in their next chapter as entrepreneurs and community leaders. DCUC and The American Legion have shown true leadership in forging a united front on this issue.
Remove Artificial Cap
Now, it falls to Congress to display bipartisan leadership of its own. Let’s remove the artificial lending cap, unlock the doors of opportunity, and watch veteran-led businesses thrive. In doing so, we will send a resounding message: America believes in our veterans – on the battlefield, in business, and in every endeavor of civilian life. It’s time to pass the Veterans Member Business Loan Act without delay.
Our veterans have earned nothing less.
Jason Stverak is chief advocacy officer with the Defense Credit Union Council.
