WASHINGTON–The Defense Credit Union Council (DCUC) and The American Legion have entered into a new partnership, the result of which is support from the veterans’ group for the Veterans Member Business Loan Act, which would exempt business loans made to veterans from the 12.5% cap on member business loans for federal credit unions.
The two organizations have sent joint letter to congressional leaders calling for them to swiftly advance H.R. 507 and S. 110, respectively.
The partnership with the American Legion will add some oomph to efforts to get the legislation, which has stalled in several prior sessions of Congress, passed, according to DCUC Chief Advocacy Officer Jason Stverak.
‘Extra Support’
“As our nation’s largest veterans service organization, I think it adds an extra amount of support for DCUC’s long held campaign to pass the veteran’s MBL legislation,” said Stverak. “We look forward to working with American Legion to make this a priority for both of our 2026 advocacy programs. They are going to be looking for ways to partner up on Capitol Hill to help educate members of Congress and their staff on the need for Congress to quickly pass this legislation. This partnership has never been seen before in the credit union space. The ability for DCUC as the national credit union trade association to partner with others outside of our sphere of influence, and to help bring additional resources grassroots support–the bully pulpit, so to speak, on this issue is incredibly important, and we look forward to working with them their members to help get this across the finish line and signed into law by the president.”
Stverak reiterated DCUC’ position that the legislation will “help remove the handcuffs that have been placed, particularly on defense credit unions, on our ability to serve members that have been part of our institutions for their entire military careers.
No Quid Pro Quo
In response to a question from the CU Daily during a call with the media, Stverak said the agreement with the American Legion is not any kind of quid pro quo in which that organization is asking for assistance from DCUC on its priorities in Congress.
“They haven’t asked for any. But I think if there is an issue that we believe would benefit our members and the members they serve and active duty armed forces and veterans, we will be the first to stand up and work with them,” said Stverak, quoting former college and Olympic hockey coach Herb Brooks’ motto that “The name on the front of your jersey is more important than the name on the back” as a reason for partnering.
What the Letter States
“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 organizations said in a statement.
The letter, sent to Speaker Mike Johnson, Senate Majority Leader John Thune, Senate Minority Leader Chuck Schumer, and House Minority Leader Hakeem Jeffries, stressed how too many veterans face unnecessary barriers when seeking financing to start or grow businesses after their military service.
“While veteran-owned businesses already employ more than 5.3 million Americans and generate nearly $963 billion annually, the share of U.S. businesses owned by veterans has declined sharply in recent years, falling from 11% in 2014 to just over 8% in 2020,” the letter states. “Veterans bring discipline, leadership, and proven skills to entrepreneurship, yet they are consistently underserved by traditional lenders. This decline signals that thousands of capable veterans who could be creating jobs and strengthening our communities have instead 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.”
According to DCUC and the American Legion, 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. Seventy-five percent of veterans cite access to capital as a top challenge when starting or expanding a business.
‘Uniquely Positioned’
DCUC and The American Legion stressed that credit unions, particularly those serving military communities, are uniquely positioned to help close this gap. As not-for-profit, member-owned institutions with deep ties to service members and veterans, credit unions are eager to expand responsible lending to veteran entrepreneurs. However, an outdated federal cap on credit union member business lending, set at 12.25% of assets, often forces credit unions to turn away qualified veteran borrowers, the organizations said.
“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,” said DCUC and the American Legion. “No veteran should be told ‘we’ve hit our limit’ because of an arbitrary rule enacted decades ago.”
Removing the Barrier
The Veterans Member Business Loan Act would remove this barrier by exempting loans to veteran-owned businesses from the lending cap, while maintaining all safety and soundness requirements. Similar exemptions already exist for residential mortgage and agricultural loans.
“The Veterans Member Business Loan Act doesn’t ask for any new federal program or spending; it simply removes a regulatory hurdle and lets credit unions use their own capital to do more of what they already do best: make safe, responsible loans in their communities. It is a rare opportunity to enact a policy change that is straightforward, bipartisan, and profoundly impactful without burdening the federal budget,” the organizations stated.
Bipartisan Support
The legislation has bipartisan support. In the Senate, S. 110 is led by Senators Mazie Hirono (D-HI) and Dan Sullivan (R-AK), while H.R. 507 is sponsored in the House by Representatives Vicente Gonzalez (D-TX) and Brian Fitzpatrick (R-PA), with dozens of bipartisan co-sponsors.
