GOP Urges Trump Administration to Support Community Development Financial Institutions Fund
In a significant move reflecting bipartisan concern, over 100 Republican members of Congress have urged the Trump administration to sustain the vital operations of the Community Development Financial Institutions (CDFI) Fund. This fund plays a crucial role in bolstering economic development in tribal, rural, and underserved regions of the United States.
Strong Legislative Support
The letter, spearheaded by Sen. Mike Crapo (R-Idaho) and Rep. Young Kim (R-Calif.), was addressed to Treasury Secretary Scott Bessent and Office of Management and Budget Director Russell Vought. It articulates apprehension about the fund’s future, as all CDFI Fund staff received termination notices effective December 13, threatening to disrupt the agency’s capacity to process essential grants and certifications. “CDFIs play an important role in supporting economic development in rural, tribal and other underserved communities in our states,” the lawmakers emphasized in their correspondence.
Economic Impact of the CDFI Fund
The CDFI Fund supports approximately 1,400 community lenders nationwide, including 65 federally certified Native CDFIs. These organizations provide capital in areas where traditional banking options are minimal or nonexistent. The Native American CDFI Assistance program, since its inception in 2001, has distributed over $221 million, resulting in more than $1.6 billion in loans and investments throughout Native communities, demonstrating its profound impact on economic growth and community resilience.
Over its 30-plus years of existence, the CDFI Fund has allocated more than $7.4 billion to community development financial institutions and organizations. Additionally, it has facilitated $76 billion in tax credits via the New Markets Tax Credit Program and backed nearly $2.5 billion in bonds, highlighting the breadth of its financial influence across the nation.
Legislative Achievements
The importance of the CDFI Fund is not merely anecdotal; recent legislative actions underscore its significance. The One Big Beautiful Bill Act, for instance, successfully made the New Markets Tax Credit permanent, with an authorization of $5 billion per year. This initiative aims to create over one million jobs, particularly in rural America—a clear indicator of the positive socioeconomic ripple effects of such programs.
The Senate’s passage of the 2026 National Defense Authorization Act has also introduced provisions to establish a secondary market, which would enable CDFIs to funnel more capital to small businesses. A notable component of this legislation is a proposed annual set-aside of $50 million for Native CDFIs aimed at expanding homeownership in tribal regions.
Political Backlash
The GOP’s letter comes in the wake of criticism from Sen. Mark Warner (D-Va.), co-chair of the Senate CDFI Caucus alongside Crapo. During a recent press call, Warner labeled the terminations as emblematic of a “chaotic administration,” suggesting that the move reflects an intention to undermine the program from the inside out. “You can’t fire all the people and then continue the program,” he remarked, highlighting the rigorous certification process that CDFIs must undergo and the detrimental impact these layoffs could have on future operations.
Warner has since expressed a commitment to collaborating with Crapo to rebuild bipartisan support, stressing the imperative nature of maintaining robust funding mechanisms for CDFIs. Earlier this year, a coalition of 26 senators from both parties urged the administration to release $324 million in previously appropriated CDFI Fund awards, which include essential funding for Native lenders.
Continued Advocacy
Organizations like the Native CDFI Network are actively engaging with both Republican and Democratic congressional leaders to advocate for the revitalization and protection of the CDFI Fund. Pete Upton, the CEO of the Native CDFI Network, mentioned that his organization has been diligently working to address the ramifications of the termination notices and will continue to push for the fund’s security during their legislative day in Washington on December 10.
This collective effort from lawmakers across the aisle underscores the criticality of the CDFI Fund in supporting financial growth and stability in rural and Native communities, highlighting its role in fostering economic opportunities for some of the nation’s most underserved populations. As discussions continue, the conversation around the CDFI Fund’s future remains a pivotal topic in the current political landscape.