Biden Administration Pledges Support for CDFIs & MDIs

Treasury Secretary-designate Janet Yellen meets with representatives of CDFIs and MDIs, including two credit union officials.

Treasury Secretary-designate Janet Yellen, (Source: Shutterstock)

The incoming Biden Administration made a firm commitment to support the Community Development Financial Institutions program this week when Treasury Secretary-designate Janet Yellen met Monday with representatives of CDFIs and Minority Depository Institutions, including two credit union officials.

Among those meeting with Yellen and Deputy Treasury Secretary-designate Wally Adeyemo in a conference call were Bill Bynum, CEO of Hope Credit Union, which has its headquarters in Mississippi, and Martin Eakes, CEO of Self-Help Credit Union in North Carolina. Bynum is a member of the incoming administration’s transition team examining the CFPB.

In each of its budgets, the Trump Administration has called for elimination of the CDFI program, although the president tempered that opposition during the 2020 campaign. Most recently, the administration opposed CDFI funding contained in the FY21 omnibus spending measure but did not protest the $12 billion for CDFIs contained in economic stimulus plan. And while testifying before a House Appropriations subcommittee, Treasury Secretary Steven Mnuchin has noted the strong congressional support for the CDFI program.

Yellen and Adeyemo said the incoming Biden Administration supports CDFI and MDI lending efforts.

“Dr. Yellen and Mr. Adeyemo pledged their commitment to increasing CDFIs and MDIs’ small business lending capacity – including capital and technical capacity – so they can continue to expand and grow and deliver support to those hardest-hit by this crisis and lift up communities that have been denied access to mainstream banking and lending services,” the Biden Transition said in a summary of the meeting.

The summary stated that during the meeting, Yellen acknowledged the role CDFIs and MDIs play in delivering banking services to unbanked and underbanked communities. She noted the stimulus funding of $9 billion for a new Emergency Capital Investment Program and $3 billion for the CDFI fund, promising to ensure that the funds are distributed efficiently and effectively.