The Defense Credit Union Council (DCUC), which represents more than 200 credit unions serving military members, veterans and their families, voiced strong support for a Senate proposal to expand deposit insurance protections for small businesses while urging Congress to also ease restrictions on credit union lending.
In a letter sent Aug. 25 to Sens. Bill Hagerty (R-Tenn.) and Angela Alsobrooks (D-Md.), DCUC praised their amendment to the National Defense Authorization Act that would raise insurance coverage for business transaction accounts from $250,000 to as much as $20 million at community financial institutions. DCUC said the reform would close a “dangerous gap” that has left many small firms vulnerable, especially during banking turmoil such as the failures of March 2023.
“Your proposal to raise the insurance limit on business transaction accounts to $20 million … directly addresses this problem,” Jason Stverak, DCUC’s chief advocacy officer, wrote. He added that the measure “will strengthen small businesses’ confidence that every dollar they deposit for payroll and operations is safe.”
While endorsing the phased-in approach to funding higher coverage, DCUC stressed the need for parity between banks and credit unions, and called on lawmakers to eliminate the statutory cap that restricts credit union member business lending to 12.25% of assets. DCUC specifically urged support for the Veterans Member Business Loan Act, which would exempt loans to veteran-owned businesses from the cap.
“Deposit insurance reform and MBL cap relief go hand-in-hand,” Stverak wrote, arguing the combination would both safeguard deposits and expand credit access for entrepreneurs.
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