A Navy veteran has a solid business plan, a contract opportunity for repair components, and a credit union ready to lend.
Then the math gets in the way.
The credit union has already hit its cap on business loans, so the answer is no. Not because the loan is risky, but because of a ceiling written into federal law.
That’s the problem the Defense Credit Union Council (DCUC) wants Congress to fix. The group has asked lawmakers to fold the bipartisan Veterans Member Business Loan Act (H.R. 507/S. 110) into the Fiscal Year 2027 National Defense Authorization Act (NDAA). Its pitch links two goals that rarely share a sentence: more capital for veteran-owned businesses and a sturdier supply chain for the military.
What DCUC Is Asking For
DCUC sent its letter to the chairs and ranking members of four committees: House Financial Services, Senate Banking, House Armed Services, and Senate Armed Services. The request is simple. Work together and get the bill into the final NDAA.
The legislation would exclude qualifying loans to veterans from the statutory definition of a member business loan. That matters because of the cap. Credit unions subject to it can generally lend no more than 12.25 percent of their assets to members for business purposes, and the limit can be lower depending on net worth. DCUC argues the ceiling can block an otherwise sound loan even when the borrower has a viable plan and the lender is willing.
The letter is careful about what the bill doesn’t do. “The legislation creates no new federal lending program, appropriates no new loan funds, and provides no new government guarantee. Credit unions would remain accountable for underwriting, capital, liquidity, and safe lending. We are asking Congress to remove a barrier, not remove responsibility,” it states.
Why the Defense Angle
DCUC points to the Small Business Administration’s Smaller War Plants Commission, which works to expand small-business defense production and improve access to capital. The SBA reports that small businesses make up more than 70 percent of the defense industrial base. The commission’s priorities include manufacturing, electronics, batteries, naval shipbuilding, and repair components.
Anthony Hernandez, DCUC President/CEO and a retired U.S. Air Force colonel, framed it this way: “A strong military needs a strong industrial base behind it, and veteran-owned small businesses should have every opportunity to help build it.” He added that the policy would help veterans buy equipment, hire workers, and compete for business while keeping the military supplied and ready.
Jason Stverak, DCUC’s Chief Advocacy Officer, was blunter. “Washington cannot ask veterans to help rebuild America’s defense industrial base while leaving an unnecessary barrier between them and the capital needed to do the job,” he said. “A contracting opportunity does not buy a milling machine. A statement of support does not cover payroll. Congress needs to connect its support for American production with responsible financing that helps businesses actually produce.”
What to Do Next
The NDAA is where this fight will be decided, and the final text is typically hammered out between the committees DCUC wrote to. If you run a credit union, a veteran-owned business, or a trade group, now is the time to tell your House and Senate members you support H.R. 507/S. 110. Mention the bill numbers and the NDAA by name, and share a real example of a loan that stalled because of the cap. Specific stories travel further in a congressional office than general support does.