President Biden’s Budget Increases CDFI Funding by 5%
The proposed budget also increases SBIC lending programs to nearly $58 billion.
According to details from President Joe Biden’s $6.9 trillion proposed budget released Thursday, the Community Development Financial Institutions (CDFI) Fund would see an increase of $17 million in fiscal year 2024, a 5% increase over 2023 levels.
Of the more than 1.300 certified CDFIs in the country, 480 of those are credit unions.
Historically, the CDFI Fund distributes grants and equity investments for community development initiatives in underserved and often low-income communities.
The 184-page budget proposal also included some extra financing support for the CDFI Fund.
“To better address the shortage of long-term affordable credit for development projects in disadvantaged communities and unlock up to $500 million in financing support, the Budget also includes a $10 million subsidy for the CDFI Fund’s Bond Guarantee Program,” the budget proposal stated.
Last October, the CDFI Fund initiated a six-month blackout period for new CDFI Certification Applications as officials were working on a new application process to be rolled out on April 3, 2023.
After pushback from organizations like CUNA and NAFCU on the potential harm the new application might have on credit unions, the blackout period has been extended for an undetermined amount of time.
A statement from the CDFI Fund in January said it “has been deliberate in its efforts to update the CDFI Certification process and will continue with that approach by carefully reviewing all public comments received in response to the latest request for public comments. While a lengthy delay should not be necessary, the time needed to deliberate on these comments and further adjust the Application materials will require the CDFI Fund to postpone the launch of the new Application and its associated reporting tools beyond the previously anticipated April timeline.”
The statement added, “During this period, the CDFI Fund’s current pause on CDFI Certification Application submissions will continue to remain in effect.”
Two other credit union-related items in the proposed budget included:
- $4 million for the NCUA’s Community Development Revolving Loan Fund, a $500,000 increase from 2023.
- $58 billion for the Small Business Administration’s 7(a) loan guarantee, 504 loan, Small Business Investment Company and Microloan programs.
READ MORE: The proposed Budget of the U.S. Government, Fiscal Year 2024.