President Donald Trump signed an Executive Order (EO) Friday limiting the Community Development Financial Institutions (CDFI) Fund to its statutory functions, and limits those statutory functions to the minimum permitted by law. This means that any grants must be consistent with those functions and subject to appropriations. Under the CDFI Fund’s current umbrella authority there are various grant programs with differing and specific goals of those programs. At question is which of these will be determined to be statutorily permitted. 

The Treasury Department has seven days from Friday (March 21) to recommend what activities can continue. The Continuing Resolution passed by Congress Friday continues to fund the CDFI Fund at its FY2024 appropriations level and is anticipated to have $320 million available for grants in its 2025 award round. The CDFI Fund is currently accepting applications for 2025 awards through March 21.

America’s Credit Unions sent this letter to Treasury seeking clarifications and sharing our perspective.  Almost 500 credits unions are CDFI-certified, which qualifies them to receive grants through the fund to invest in their communities through more affordable loans and financial services, financial education, and innovative tools.

FAQs on the CDFI Fund EO are available. America's Credit Unions, leagues, Inclusiv and others continue evaluating the EO and the impact it could have on CDFI credit unions. America’s Credit Unions and our league partners consistently advocate for an appropriate amount of funding to support CDFI initiatives, as well as accountability and transparency throughout the certification and designation processes.

America's Credit Unions President/CEO Jim Nussle released this statement reacting to the Executive Order:

"Credit unions exist in the financial services marketplace to provide provident credit to millions of Americans, and they do it in a way that creates financial well-being so people are empowered to stand on their own two feet. The CDFI Fund has allowed hundreds of credit unions to bolster economic opportunity in their communities and allow their members to achieve the American Dream—further enhancing our nation's strength. America's Credit Unions will continue to engage the Trump Administration, Treasury Department, and other stakeholders on programs that support these shared goals."

In January, Nussle wrote to CDFI Fund Director Pravina Raghavan to reiterate the importance of the fund in supporting credit unions' efforts to meet the needs of underserved communities and Americans working to achieve financial stability.  The CDFI Fund was also discussed as a way to support community banking during a House Financial Services Committee hearing earlier this year. America's Credit Unions and leagues will continue to advocate for effective operation of the CDFI Fund to support economic development and growth across the country.  

America’s Credit Unions, in conjunction with our league partners, will continue to advocate for capital programs that support the efforts of our members to reach all Americans.