WASHINGTON — The Defense Credit Union Council is urging Congress to pass legislation exempting loans to veterans from credit unions’ member business lending cap, saying the change would expand financing options for veteran entrepreneurs without creating a new federal lending program.
DCUC said it is sending lawmakers a new policy white paper documenting financing barriers facing veteran business owners and explaining how the Veterans Member Business Loan Act would address those obstacles.
“Veterans bring leadership and experience to the businesses they build. They deserve access to responsible financing that helps put those strengths to work,” said Anthony Hernandez, DCUC’s president and CEO and a retired Air Force colonel. “Credit unions have relationships with military families that continue long after service ends. Congress should give them greater flexibility to support a veteran’s next chapter as a business owner.”
Lending Cap Limits Options
Federal law generally limits covered credit unions’ member business lending to 12.25% of assets, subject to exceptions and a potentially lower limit based on an institution’s net worth. The restriction applies to a credit union’s total outstanding member business loans.
DCUC said that ceiling can prevent a credit union from making an otherwise sound loan to a veteran even when the institution has the resources and expertise to lend.
“A cap on a credit union’s total business lending says nothing about whether a veteran can repay a particular loan,” said Jason Stverak, DCUC’s chief advocacy officer. “When a qualified borrower and a capable lender are ready to move forward, federal law should allow them that opportunity. Congress should pass this bipartisan bill before the 119th Congress ends.”
Financing Challenges For Veterans
The council’s white paper, “Unlocking opportunity for those who served: The Veterans Member Business Loan Act explained,” cites federal research showing differences in financing challenges and funding sources between veteran and nonveteran business owners.
According to DCUC, findings from the Federal Reserve’s 2025 Small Business Credit Survey show 38% of majority veteran-owned employer firms reported credit availability as a financial challenge, compared with 28% of firms with no veteran ownership.
A 2025 Government Accountability Office report, using 2022 survey data, found 82% of veteran business owners used personal savings and assets to finance ongoing operations and improvements, compared with 68% of nonveteran owners.
DCUC said that reliance on personal funds can leave business needs competing with household emergencies for the same savings.
Targeted Relief
As introduced, the House and Senate versions of the Veterans Member Business Loan Act, H.R. 507 and S. 110, would exclude extensions of credit made to veterans from the federal definition of a member business loan, removing those loans from the cap calculation.
DCUC said the legislation would create no new federal lending program, appropriate no new loan funds and provide no new government guarantee. Credit unions would lend their own resources and remain responsible for underwriting, capital, liquidity and safe lending practices.
The council is urging the House Financial Services Committee and Senate Banking Committee to advance the legislation and congressional leaders to secure a path to enactment this year, including through an appropriate legislative package.
“It’s time to turn bipartisan support into a vote and expand financing opportunities for our Nation’s veterans,” Stverak said.
