Biden's Budget Increases CDFI Funding by 23%
The $5.8 trillion budget proposal also hikes up amounts for FinCEN and small business lending programs.
President Joe Biden released his budget proposal for 2023 on Monday that included an increase in funding support for the Community Development Financial Institutions (CDFI) Fund, the Financial Crimes Enforcement Network (FinCEN) and a flagship small business lending program.
Inside President Biden’s $5.8 trillion proposed budget, the administration requested $331 million for CDFI efforts, an increase of 23% from the $295 million passed in the previous budget. While the U.S. Department of Treasury oversees and administers the CDFI Fund to assist credit unions to provide financial services to low-income communities, the NCUA administers the Community Development Revolving Loan Fund.
Currently, there are more than 1,100 CDFIs in the U.S.
In January, the Bremerton, Wash.-based Kitsap Credit Union ($2 billion in assets, more than 123,00 members) became the most recent credit union to gain CDFI certification.
The budget proposal also included $210 million for FinCEN. As a division of the U.S. Department of Treasury, FinCEN analyzes financial transactions for financial crimes, such as money laundering and terrorist financing.
According to the administration, the boost in FinCEN funding came along with the U.S. imposed economic sanctions against Russia for its invasion of Ukraine. The money will go toward strengthening cybersecurity efforts as phishing and financial hacking scams have increased since the war in Ukraine began in February.
The Small Business Administration’s 7(a) loan guarantee program, as well the 504 loan program and Secondary Market Guarantee program, could see funding reach $9.5 billion in Biden’s budget proposal.
According to a statement released by NAFCU, “Increasing these lending levels could drive economic growth by significantly expanding the availability of working capital, fixed capital and venture capital funding for small businesses.”