WASHINGTON — A group of bipartisan senators urged Treasury Secretary Scott Bessent to preserve the Community Development Financial Institutions Fund following an
Sens. Mike Crapo, R-Idaho, and Mark Warner, D-Va., led the group. The pair are co-chairs of the CDFI caucus, and issued a statement in support of the fund shortly after the executive order was released.
"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," the lawmakers said in the letter to Bessent. "Elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners."
The lawmakers, along with a host of other senators — including Senate Minority Leader Chuck Schumer and several Senate Banking Committee members like Sen. Mike Rounds, R-S.D., and Jack Reed, D-R.I. — underlined their support for the CDFI sector.
"More distressed communities are being served by CDFIs than ever before, more first time buyers are receiving the financing they need to purchase a home, more community facilities are being built, and more commercial loans are reaching entrepreneurs," the lawmakers said in the letter. "A reduction in the functions and operations of the CDFI Fund will have a corresponding impact on CDFI-certified entities and local communities and we urge you to avoid this unfortunate outcome."
The executive order eliminates the "non-statuatory" parts of a number of federal programs, including the CDFI Fund. The Treasury Department is supposed to study the issue and report back on which parts of the program — much of which is enshrined in statute — can be slashed.
Bessent earlier this week suggested that at least part of the CDFI Fund would stick around.
"CDFIs are a key component of President Trump's commitment to supporting Main Street America in the pursuit of job growth, wealth creation and prosperity," he said in a statement. "As required by President Trump's March 14, 2025, executive order, the Treasury Department will provide a response to the director of the OMB on this matter and looks forward to future engagement with CDFIs and other stakeholders to strengthen the impact of these statutory programs and incentivize economic opportunities for all Americans."
That said, the program is missing key Republican support from the principle banking policy leads on Capitol Hill, signaling that many Republicans aren't keen to pick a fight with the Trump administration over the fund.
"Chairman Scott has long supported efforts to increase access to capital in underserved communities and will continue to work with his colleagues and the Trump administration to unleash both private and public investment in areas across the country that need it most, whether that's through the CDFI Fund or other programs," the office of Senate Banking Committee Chair Tim Scott, R-S.C., told American Banker in a statement
The lawmakers in the letter to Bessent also pointed out President Donald Trump's previous support of this program.
"Every federal dollar injected into a CDFI generates at least eight more dollars from private-sector investment," they said. "Due in large part to the investments the Trump Administration made in the CDFI Fund in 2020, industry assets have tripled and the number of CDFI-certified entities has risen by 40%."
Bank groups, including the American Bankers Association, America's Credit Unions, the Community Development Bankers Association and others also wrote to Warner and Crapo earlier this week in support of the fund.
"The CDFI Fund supports the administration's commitment to putting America First by ensuring that all communities — urban and rural, large and small — have access to the capital necessary to participate in and contribute to our national economy," the groups said. "The CDFI Fund is a targeted, accountable, and impactful program that enables private capital to do more for more Americans."
