WASHINGTON, D.C (July 30, 2025) |
The Defense Credit Union Council (DCUC) announced its strong support for the Protecting Access to Credit for Small Businesses Act. The legislation would block the Small Business Administration (SBA) from becoming a direct lender, instead preserving the essential role of community-based financial institutions — including credit unions — in delivering small business loans to Main Street America.
DCUC, the leading advocate for credit unions serving military and veteran communities, views the bill as a vital safeguard for America’s small business lending system and a direct win for military-connected entrepreneurs.
“We are grateful to Senator Tim Scott and his colleagues for standing up for America’s military entrepreneurs,” said Anthony Hernandez, DCUC President/CEO. “This bill ensures that credit unions can continue to provide personalized, community-based lending services to our servicemembers, veterans, and their families. It is a critical step toward halting unnecessary government overreach and preserving trusted private-sector partnerships.”
Protecting Community-Based Lending in Military Communities
The legislation responds to concerns over an SBA proposal to expand direct lending authority under its 7(a) loan program — a move widely criticized by industry experts and lawmakers as inefficient and duplicative. By prohibiting the SBA from making loans directly, Senator Scott’s bill protects the long-standing public-private model that has enabled thousands of small businesses to flourish with the help of local credit unions and banks.
Supporters argue that community-based lenders are far better equipped to meet the unique needs of small business owners, particularly those in military communities. Unlike federal bureaucracies, credit unions offer relationship-based lending, localized decision-making, and a deep understanding of military borrowers — factors that are essential for supporting veteran-owned startups and growing businesses.
DCUC has long advocated for reforms to SBA programs that would level the playing field for credit unions and remove regulatory barriers to participation. Key among these is the outdated Member Business Lending (MBL) cap, which limits most credit unions’ business lending to just 12.25% of their assets — a restriction that hampers their ability to support growing veteran-owned businesses.
To address this, DCUC has championed the Veterans Member Business Loan Act (VMBLA) — bipartisan legislation that would exempt loans made to veteran-owned businesses from the MBL cap. The Council continues to urge Congress to pass VMBLA alongside broader SBA reforms, enabling credit unions to provide more capital to deserving entrepreneurs without increasing systemic risk.
“Credit unions serving veteran communities are ready to do more — but their hands are tied by an arbitrary lending cap that doesn’t reflect today’s needs,” said Jason Stverak, DCUC’s Chief Advocacy Officer.
DCUC has reiterated these concerns in letters to both chambers of Congress, including a recent message to the House Small Business Committee in June 2025. In Senate testimony earlier this year, DCUC stressed the urgent need to modernize SBA lending policies to ensure veterans and military families have equitable access to business capital.
Empowering Veteran-Owned Businesses to Thrive
Veteran-owned businesses represent a powerful economic engine, generating nearly $1 trillion in annual revenue and employing over 5 million Americans. Yet, these entrepreneurs often face disproportionate barriers to funding due to limited credit histories, frequent relocations, or lack of collateral. Defense credit unions are uniquely positioned to bridge this gap with mission-driven services tailored to the military experience.
By blocking the SBA from competing directly with credit unions, and by modernizing outdated credit union lending restrictions, this legislation ensures military entrepreneurs can access the capital they need — from lenders who understand their circumstances and champion their success.
“Our nation’s heroes have earned every opportunity to thrive in civilian life,” Hernandez added. “By empowering their credit unions to support small business growth — through SBA partnerships and fair lending authority — Congress is investing in the future of military families and local communities.”
DCUC stands ready to work with lawmakers from both parties to advance the Protecting Access to Credit for Small Businesses Act and other critical reforms. DCUC applauds Senator Scott and his colleagues for recognizing the essential role of credit unions in advancing small business success, especially for those who’ve served our country.
Stay up to speed with DCUC’s advocacy and representation at dcuc.org/news.