WASHINGTON—Whether all the staff at Treasury involved with the CDFI Fund will indeed ultimately be terminated—all but terminating the fund as well—remains a big unknown in Washington, according to one person with America’s Credit Unions.
As the CU Daily has reported, as part of the government shutdown, the Trump administration has issued reduction-in-force notices to between 1,400 and 1,500 Treasury employees, including everyone who oversees the CDFI Fund. The RIFs provide a 60-day notice of intent to terminate, which would occur in mid-December if the government follows through.
Approximately 444 credit unions are community development financial institutions, many of which have been active in distributing billions of dollars in their communities over the years.
Money Allocated, But…
Greg Mesack, SVP of advocacy with America’s Credit Unions, noted the trade group has been pressing members of Congress, Treasury and the administration to restore the CDFI Fund staff. The recently passed National Defense Authorization Act includes several hundred million dollars for the CDFI Fund, which the Trump administration has been seeking to axe. Even with the dollars allocated, the lack of any staff to oversee applications and distributions of the funds is another way to eliminate it.
Strong Bipartisan Support
As Mesack noted, there remains bipartisan support in Congress for the CDFI Fund, adding it isn’t a Republican or Democratic issue or a conservative or progressive issue, but instead an issue for any elected official representing rural or underserved communities.
Mesack, who earlier told the CU Daily he remains optimistic that the CDFI Fund will be fully funded with staff to distribute those funds, again said the CDFI Fund is “so important” to so many communities across the country.
Asked by the CU Daily during a media call whether the termination of the CDFI Fund staff might be a bargaining ploy by Republicans seeking to pressure Democrats to pass a government-funding measure, Mesack said the issue is an ideological one, and that includes within the GOP.
Internal Ideological Struggle
“I think (Treasury) Secretary (Scott) Bessent and the Treasury Department basically really do value the CDFI Fund,” he said. “They’ve been supportive in other discussions we’ve had. We saw them trying to make efforts to update the applications, as opposed to (OMB Director Russell) Vought and the folks at OMB who don’t really believe in the CDFI Fund and believe we’d be better off without it.
“…In the grand scheme of government funding I don’t think the CDFI Fund staff and the CDFI Fund are a big bargaining chip,” Mesack continued. “Quite candidly, the Democrats have shown strong support for it and the Republicans have shown strong support for it, but the overall dollar amounts are not something that drive much in the way of leverage. I think this is more of an ideological struggle between two parts of the administration.”
