WASHINGTON—NAFCU and CUNA have each sent letters to the House Veterans’ Affairs Subcommittee on Economic Opportunity and Senate Banking Committee ahead of this week’s hearings regarding veterans' economic and financial wellness, offering support for the Veterans Members Business Loan Act.
The legislation would exempt loans made to veterans from the credit union member business lending (MBL) cap and has been introduced in both chambers.
“This bill would improve veterans' access to necessary capital by removing statutory barriers that hinder credit unions' ability to meet the financial needs of our nation's veterans,” wrote NAFCU Vice President of Legislative Affairs Brad Thaler. “As a result of the close relationships credit unions maintain with their members, credit unions are often willing to assist members when other lenders refuse.
‘Unfortunate’ Limitation
“Unfortunately, credit unions face a statutory MBL cap that hinders their ability to fully serve the needs of small businesses,” continued Thaler. “Enacting this legislation will help ensure that credit unions can continue supporting veteran-owned businesses.”
Thaler also expressed opposition to the ongoing efforts by banking associations to change the law regarding Department of Defense (DoD) land leases for financial institutions as proposed in the draft Military Banking Program Improvement Act, which has been submitted as part of the Association of Military Banks of America’s testimony.
“The fact is that there are significant differences between for-profit banks and not-for-profit credit unions,” wrote Thaler.
CUNA: Provide ‘More Options’
“As not-for-profit financial cooperatives with a people-first focus, credit unions look beyond credit scores and collateral to assess loan opportunities. Credit unions are also willing to make smaller loans,” CUNA’s letter reads.
“By removing veteran-owned businesses from the credit union member business loan cap, S. 539 gives veterans more loan options and access to capital. The arbitrary and restrictive business loan cap, which has been imposed on credit unions since 1998, limits members’ access to these types of loans from their trusted financial services partner,” it adds.
The letter cites a report showing 23% of transitioning veterans indicate they would like to start businesses, and that S. 539 would “help a good portion of the veteran community.”
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