WASHINGTON — President Donald Trump’s fiscal 2027 budget proposes cutting the Community Development Financial Institutions Fund by $204.5 million, placing the Treasury program in the administration’s “Program Cuts and Eliminations” section and recasting its mission toward rural communities.
According to the newly released White House budget document, the administration said it would “continue” redirecting CDFI Fund awards to rural communities, arguing those areas are where the grants and awards are “most beneficial.” It says the refocused use of the fund would be aimed at expanding access to capital, financing infrastructure and supporting Main Street business development in rural America.
The White House has sought to all but eliminate the CDFI Fund since the Trump administration took office, with the credit union trade groups and numerous other organizations fighting back and successfully pushing Congress to restore funding. Congress has allocated $324 million for FY 2026, which is identical to the funding levels for the three prior years.
However, even with the funding approved, the Office of Management and Budget has been slow to disburse any of the funds, leaving credit unions and other CDFIs waiting on the money to fund their approved applications.
More than 400 credit unions are CDFIs.
America’s Credit Unions Responds
“Proposals to reduce funding for the CDFI Fund are concerning at a time when communities across the country are relying on access to safe, affordable financial services. CDFIs play a critical role in expanding economic opportunity, particularly in underserved areas, and any reduction in support risks limiting that impact,” Scott Simpson, President and CEO of America’s Credit Unions, said in a statement. “We share the President’s focus on revitalizing rural communities. With nearly 900 credit union branches serving as the sole financial institutions in those census tracts, credit unions are often the only access point for financial services and remain committed to reaching underserved communities wherever they are. We look forward to working with Congress to ensure these vital investments remain strong and continue to meet the needs of American families and small businesses.”
America’s Credit Unions reiterated that credit unions generate $12 in private capital for each federal dollar awarded through the program.
Administration Cites ‘Abuse’
In its new budget, the White House said of the proposed cut to the CDFI Fund that prior CDFI awards “were abused to advance a partisan agenda” and alleges past awards supported lending practices in which race was a factor in loan access, as well as products and services tied to immigration, gender and climate-related initiatives.
The budget specifically cites “immigration detention bonds,” services tied to gender-affirming care, and wind farm projects as examples of activities it says taxpayer dollars should no longer support through the fund.
CU Strategic Planning Responds
Two executives with CU Strategic Planning, which has obtained more CDFI grant dollars for credit unions than any other organization, also issues statements:
- “While the president makes his budget request, Congress actually writes the budget, and we have seen this same pattern in almost every Trump budget,” said CXO Mike Beall. “CU Strategic Planning has already started discussions with congressional appropriators and the Senate Community Development caucus. We will be fighting our way back to normal FY 2027 spending levels for CDFI in the months to come.”
- “President Trump’s 2027 budget request includes significant cuts to the CDFI Fund, which is not unexpected,” President Stacy Augustine This year’s request contains similar descriptions of the CDFI Fund as last year’s, claiming that the Fund’s awards were “abused to advance a partisan agenda under prior administrations.” Despite similar claims last year, the final approved FY2026 budget remained at the $324 million level seen for the last several years. The President has attempted to zero out the CDFI Fund’s budget in every budget during both of his terms,” Augustine continued. “Both houses of Congress, on both sides of the aisle, have responded every year by continuing to fund what they and their constituents know is a valuable program that advances opportunity in communities across this country.”
Deadline For Awrds Approaching
As the CU Daily reported here, for the first time since September 2025, the CDFI Fund has posted information about the FY 2025 FA and TA Awards, according to CU Strategic Planning, which is calling the move a “hopeful sign.”
The notice stated that the deadline for FY 2025 application updates is now April 10.
“The Fund previously published amendments to the FY 2025 Notice of Funding Availability (NOFA) on Sept. 25, explaining that the changes were intended to ‘promote consistency with recent court decisions regarding race-based preferences and reflect the current Administration’s priorities, as reflected in the President’s executive orders’,” CU Strategic Planning announced. “This was about six months after the original FY 2025 FA and TA application deadline.”
Process ‘Cut Short’
CU Strategic Planning said applicants that had reached step 4 in the scoring and evaluation process were given the opportunity to update their applications by Oct. 27.
“However, the process was cut short by the fall government shutdown, and applicants have not been able to submit updates since that time,” the company said. “This update from the Fund is a positive sign that award operations are beginning to move forward again, as well as a hopeful sign that the NOFA for the FY 2026 FA and TA round will be coming soon.”
CU Strategic Planning said it has submitted requests to update its clients’ 2025 FA applications in AMIS, the Fund’s awards management system, and has updated files ready to submit.
For additional info, go here.
Groups Say Funds Could be Used to Boost Housing
Separately, as the CU Daily reported here, earlier, a coalition of community development financial institution (CDFI) groups that that includes Inclusiv is urging the White House to immediately release more than $1 billion in already-approved federal funding, arguing the move could support the construction or preservation of roughly 100,000 affordable housing units nationwide.
In a March 19 letter to Kevin Hassett, director of the National Economic Council, the organizations praised the Trump administration’s recent housing initiatives while calling for faster deployment of existing funds to address persistent housing shortages.
