You’ve got credit unions ready and willing to lend money to veteran-owned businesses and rural entrepreneurs, and you’ve got those businesses desperately needing capital. But outdated federal regulations are basically standing between them like an overprotective bouncer at an empty club.
The Defense Credit Union Council (DCUC) just told Congress it’s time to update the rulebook. In comments submitted to the House Committee on Small Business Subcommittee on Rural Development, Energy, and Supply Chains, they made their case for why expanding access to capital isn’t just good policy—it’s common sense.
The Stakes Are Higher Than You Think
Let’s talk numbers for a second. Veteran-owned businesses aren’t some niche corner of the economy. We’re talking about roughly 1.76 million businesses that employ 5.3 million Americans and generate nearly $963 billion in revenue annually. These aren’t hobby shops—they’re economic engines that power local communities and play a critical role in everything from energy and infrastructure to manufacturing and supply chains.
“Veterans bring valuable leadership, discipline, and experience to the small-business community, but having a strong business plan is not enough if responsible financing is unavailable,” says Jason Stverak, DCUC Chief Advocacy Officer. Translation? All the military training and business savvy in the world won’t help if you can’t get a loan.
The 12.25% Problem
Here’s where things get technical for a moment—but stick with me, because this matters. Federal law currently caps the total member business loans a credit union can hold at 12.25% of its assets. Sounds reasonable until you realize what it means in practice: a perfectly healthy credit union with capital to spare might have to turn away a qualified veteran entrepreneur simply because they’ve hit an arbitrary ceiling.
It’s like being told you can’t have dessert because the restaurant has a policy limiting sweets to 12.25% of all orders, even though the kitchen is fully stocked and you’re willing to pay. The policy exists, sure, but it’s not actually protecting anyone.
Enter the Veterans Member Business Loan Act (H.R. 507 and S. 110). This bipartisan legislation would exclude loans to veteran-owned businesses from that statutory calculation. And before anyone panics about relaxed standards—relax. Credit unions would still need to follow all the same underwriting requirements, regulatory supervision, capital standards, and safety protocols. They’d still evaluate each loan based on the borrower’s ability to repay and business viability. This isn’t about cutting corners; it’s about removing roadblocks.
“No veteran with a sound business plan should be denied a responsible loan because the credit union prepared to serve that veteran has reached an outdated statutory ceiling,” says Anthony Hernandez, DCUC President and CEO (and retired U.S. Air Force Colonel, so he knows a thing or two about both veterans and unnecessary red tape).
It’s Not Just About Lending Caps
The DCUC didn’t stop at the lending cap issue. They also pushed for broader regulatory relief that would let credit unions focus more energy on actually serving members instead of drowning in paperwork.
Their wish list includes some pretty reasonable requests:
- Cut down on duplicative reporting and examination requirements (because filling out the same form three times doesn’t make anyone safer)
- Provide clear compliance expectations with reasonable implementation periods (shocking concept, right?)
- Actually analyze how regulations impact small entities before rolling them out
- Regularly review existing regulations to eliminate ones that don’t address real risks anymore
They’re also advocating for targeted reforms to Section 1071 of the Dodd-Frank Act—that’s the provision dealing with small-business lending data collection. The goal isn’t to gut consumer protections or fair-lending objectives. It’s to reduce the disproportionate burden on smaller financial institutions that don’t have armies of compliance officers.
Oh, and while they were at it, DCUC encouraged Congress and the Small Business Administration to modernize how credit unions participate in the SBA 7(a) Loan Program. Apparently, the current requirements and administrative barriers are complicated enough to actively discourage participation. Which seems counterproductive when the whole point is to get more capital flowing to small businesses.
The Rural Access Challenge
Here’s another head-scratcher: many rural communities are basically financial deserts. Residents and business owners face limited lender options, long drives to the nearest branch, and declining access to personalized service. Meanwhile, some credit unions that could serve these communities—ones with the capital, infrastructure, technology, and local relationships to do it well—are legally prohibited from expanding their membership.
“Regulatory relief alone will not solve the access problem if credit unions remain legally prohibited from serving communities that need financial services,” Stverak points out.
These outdated field-of-membership restrictions are particularly problematic around military installations, National Guard facilities, and defense-related employers, where military and civilian economies overlap. DCUC is urging Congress to reintroduce and pass field-of-membership legislation that would expand financial access in underserved communities.
The Bottom Line
“Access to capital and access to financial institutions are fundamental to economic opportunity,” Hernandez adds. “Credit unions are ready to serve more veteran entrepreneurs, rural businesses, and underserved communities. Congress can help make that possible by removing outdated barriers while preserving the accountability and protections that borrowers and communities deserve.”
What’s refreshing about DCUC’s approach is that they’re not asking for federal spending or guaranteed approvals for every expansion request. They’re simply asking to let qualified, regulated institutions compete for the opportunity to serve communities and small businesses they’re already equipped to help.
Sometimes the best policy changes aren’t dramatic overhauls—they’re just getting old rules out of the way so the people ready to do good work can actually do it.
Credit Unions Want to Help Veteran and Rural Businesses Grow—But Old Rules Are Getting in the Way
You’ve got credit unions ready and willing to lend money to veteran-owned businesses and rural entrepreneurs, and you’ve got those businesses desperately needing capital. But outdated federal regulations are basically standing between them like an overprotective bouncer at an empty club.
The Defense Credit Union Council (DCUC) just told Congress it’s time to update the rulebook. In comments submitted to the House Committee on Small Business Subcommittee on Rural Development, Energy, and Supply Chains, they made their case for why expanding access to capital isn’t just good policy—it’s common sense.
The Stakes Are Higher Than You Think
Let’s talk numbers for a second. Veteran-owned businesses aren’t some niche corner of the economy. We’re talking about roughly 1.76 million businesses that employ 5.3 million Americans and generate nearly $963 billion in revenue annually. These aren’t hobby shops—they’re economic engines that power local communities and play a critical role in everything from energy and infrastructure to manufacturing and supply chains.
“Veterans bring valuable leadership, discipline, and experience to the small-business community, but having a strong business plan is not enough if responsible financing is unavailable,” says Jason Stverak, DCUC Chief Advocacy Officer. Translation? All the military training and business savvy in the world won’t help if you can’t get a loan.
The 12.25% Problem
Here’s where things get technical for a moment—but stick with me, because this matters. Federal law currently caps the total member business loans a credit union can hold at 12.25% of its assets. Sounds reasonable until you realize what it means in practice: a perfectly healthy credit union with capital to spare might have to turn away a qualified veteran entrepreneur simply because they’ve hit an arbitrary ceiling.
It’s like being told you can’t have dessert because the restaurant has a policy limiting sweets to 12.25% of all orders, even though the kitchen is fully stocked and you’re willing to pay. The policy exists, sure, but it’s not actually protecting anyone.
Enter the Veterans Member Business Loan Act (H.R. 507 and S. 110). This bipartisan legislation would exclude loans to veteran-owned businesses from that statutory calculation. And before anyone panics about relaxed standards—relax. Credit unions would still need to follow all the same underwriting requirements, regulatory supervision, capital standards, and safety protocols. They’d still evaluate each loan based on the borrower’s ability to repay and business viability. This isn’t about cutting corners; it’s about removing roadblocks.
“No veteran with a sound business plan should be denied a responsible loan because the credit union prepared to serve that veteran has reached an outdated statutory ceiling,” says Anthony Hernandez, DCUC President and CEO (and retired U.S. Air Force Colonel, so he knows a thing or two about both veterans and unnecessary red tape).
It’s Not Just About Lending Caps
The DCUC didn’t stop at the lending cap issue. They also pushed for broader regulatory relief that would let credit unions focus more energy on actually serving members instead of drowning in paperwork.
Their wish list includes some pretty reasonable requests:
They’re also advocating for targeted reforms to Section 1071 of the Dodd-Frank Act—that’s the provision dealing with small-business lending data collection. The goal isn’t to gut consumer protections or fair-lending objectives. It’s to reduce the disproportionate burden on smaller financial institutions that don’t have armies of compliance officers.
Oh, and while they were at it, DCUC encouraged Congress and the Small Business Administration to modernize how credit unions participate in the SBA 7(a) Loan Program. Apparently, the current requirements and administrative barriers are complicated enough to actively discourage participation. Which seems counterproductive when the whole point is to get more capital flowing to small businesses.
The Rural Access Challenge
Here’s another head-scratcher: many rural communities are basically financial deserts. Residents and business owners face limited lender options, long drives to the nearest branch, and declining access to personalized service. Meanwhile, some credit unions that could serve these communities—ones with the capital, infrastructure, technology, and local relationships to do it well—are legally prohibited from expanding their membership.
“Regulatory relief alone will not solve the access problem if credit unions remain legally prohibited from serving communities that need financial services,” Stverak points out.
These outdated field-of-membership restrictions are particularly problematic around military installations, National Guard facilities, and defense-related employers, where military and civilian economies overlap. DCUC is urging Congress to reintroduce and pass field-of-membership legislation that would expand financial access in underserved communities.
The Bottom Line
“Access to capital and access to financial institutions are fundamental to economic opportunity,” Hernandez adds. “Credit unions are ready to serve more veteran entrepreneurs, rural businesses, and underserved communities. Congress can help make that possible by removing outdated barriers while preserving the accountability and protections that borrowers and communities deserve.”
What’s refreshing about DCUC’s approach is that they’re not asking for federal spending or guaranteed approvals for every expansion request. They’re simply asking to let qualified, regulated institutions compete for the opportunity to serve communities and small businesses they’re already equipped to help.
Sometimes the best policy changes aren’t dramatic overhauls—they’re just getting old rules out of the way so the people ready to do good work can actually do it.