WASHINGTON–With the future of the Community Development Financial Institution (CDFI) Fund hanging in the balance, Treasury has told the Congressional Budget Office that all 11 CDFI programs are statutory, meaning the funding should remain in place as the law requires the programs to continue operating.
That news is being embraced by credit unions and other CDFIs, which were shocked by a March 14 executive order signed by President Trump that sought to eliminate the CDFI fund, as well as six other programs, to the “maximum extent consistent with applicable law, and such entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”
At the time the White House order was announced Congress had already allocated $324 million in CDFI funding for 2025, which many CUs had been planning to apply for. In addition, $500 million in CDFI Bond Guarantee Authority for FY 2025 had also been approved.
Almost from the moment the executive order was published, America’s Credit Unions, the Defense Credit Union Council, the African American Credit Union Coalition, Inclusiv, state leagues, individual credit unions and companies such as CU Strategic Planning have been holding emergency meetings and lobbying elected representatives and Treasury to maintain the funding.
News of the Treasury response to OMB was first reported by American Banker.
‘Pleased’ With Decision
“America’s Credit Unions is pleased Treasury confirmed to OMB that all 11 CDFI programs are statutory and listened to our feedback on how important the programs are to communities across America,” said America’s Credit Unions’ CEO Jim Nussle in a statement. “With over 500 CDFI certified credit unions, it reflects the industry’s mission of providing safe and secure financial services so millions of people can achieve financial well-being. America’s Credit Unions is not letting the foot off the gas and will continue to engage with the White House, Treasury, and other stakeholders so that families can reach their American Dream in a prosperous economy.”
As Inclusiv noted in an earlier statement, “Since the creation of the Fund, CDFI institutions have leveraged at least $8 in private sector investment for every $1 in public funding received.”
The CDFI Fund is responsible for 11 programs or functions, including:
- New Markets Tax Credit Program
- Bank Enterprise Award Program
- Native American CDFI Assistance Program
- Housing Production-Financial Assistance
- Capital Magnet Fund
- CDFI Bond Guarantee Fund
- Small Dollar Loan Program
- CDFI Equitable Recovery Program
- CDFI Rapid Respose Program
Other Efforts
- Prior to the Treasury Statement, America’s Credit Unions Chief Advocacy Officer Carrie Hunt and Inclusiv CEO Cathie Mahon met with OMB officials to discuss ongoing CDFI issues
- A letter to Treasury from 23 senators said, in part, “Over 1,400 CDFIs represent a significant portion of America’s financial services sector, delivering over $300 billion in financial services each year to urban and rural community communities across every state. Each year, CDF’s provide affordable growth capital to over 100,000 small businesses and finance over $100 billion in residential real estate, bringing down the cost of housing through new construction and affordable home mortgages. The important work of the CDFI sector is strengthened by the CDFI Fund, which provides seed funding to new CDFIs, grows the capacity of existing CDFIs, and provides oversight to ensure federal dollars are spent appropriately. Elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners.”