WASHINGTON—While the credit union trade groups were quick to flag concerns over President Trump’s fiscal 2027 budget proposal that cuts Community Development Financial Institutions Fund by $204.5 million, another issue remains that it’s one thing to get funds allocated, and quite another when the administration declines to disburse those funds to credit unions and others that have qualified for them.
As the CU Daily reported here, the Trump administration continues to work to eliminate or reduce the CDFI fund. After zeroing out the fund for this year in its initial budget proposal, the credit union trade groups and numerous other organizations fought back and successfully pushed Congress to restore $324 million for FY 2026, which is identical to the funding levels for the three prior years.
‘If You’re Not Spending It, It Doesn’t Do Anything’
But even though Congress has budgeted the money, Treasury has yet to pay out any of the CDFI funds awarded for 2025.
“You can fund the account, but if you’re not spending it. it doesn’t do anything, so we want to make sure that not only the funds that have already been appropriated and approved by Congress and signed into law (are distributed), but that the program continues well into the future,” Jason Stverak, chief advocacy officer with the Defense Credit Union Council, said during a media call in response to a question from the CU Daily. “The money does not do any good sitting here in Washington. We have credit unions that have programs waiting on these funds. We encourage Congress and we will encourage Treasury to remove any roadblocks and get that money moving as soon as possible.”
Headed to Court?
When asked if it’s going to take litigation to get Treasury to disburse the funds, Stverak answered, “Unfortunately, that just seems to be more and more of how DC works. It could be, but I hope it’s not I think that’s kind of the last resort and I think it would make people dig in you know even deeper on each side I do hope that they get that problem solved before we get to that.”
Simpson: No Time for Speculation
Scott Simpson, president and CEO of America’s Credit Unions, said it would be “irresponsibly speculative” to guess at the timeframe by which Treasury would disburse funds.
“We continue to have those conversations and we know there are members of Congress from both sides of the aisle that are very interested in the economic value of those funds being released in the marketplace,” Simpson said.
He said litigation could ultimately be pursued by some organizations seeking the funds for which they have qualified, but added, “it’s a pathway that is also messy and I don’t think that would be an accelerated answer to the relief that we’re looking for…We’ve got a solid number of legislative leaders on both sides of the aisle and folks within the administration that can see that the value of having these funds being released.”
