The White House. Credit: Shutterstock
President Donald Trump signed an Executive Order (EO) Friday limiting the Community Development Financial Institutions (CDFI) Fund to its statutory functions, raising questions about the future of grant programs supporting underserved communities. The Treasury Department now has seven days to determine which activities can continue under the new directive.
The move has sparked concern among credit unions and financial institutions that rely on CDFI grants to provide affordable financial services and economic opportunities in low-income areas. The Continuing Resolution passed by Congress on Friday maintains the CDFI Fund’s fiscal year 2024 funding level, with an estimated $320 million available for grants in the 2025 award cycle.
Applications for these awards remain open through March 21.
Credit Union Leaders Voice Concern
America’s Credit Unions has reached out to the Treasury Department seeking clarification on how the EO will impact nearly 500 CDFI-certified credit unions. These credit unions leverage federal grants to expand access to financial education, affordable loans, and community investment initiatives.
Jim Nussle, president/CEO of America’s Credit Unions, emphasized the importance of CDFI funding in supporting financial inclusion.
“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,” Nussle said. “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.”
The Defense Credit Union Council (DCUC), representing credit unions serving military and defense communities, also expressed alarm over the executive order. The organization highlighted the crucial role CDFI funding plays in providing financial stability for military families, many of whom experience economic hardship.
“CDFI credit unions serve low-income communities that may not have access to traditional banking services,” DCUC stated in a letter to Treasury Secretary Scott Bessent. “Eliminating the CDFI Fund would jeopardize financial services for military families, small businesses, and underserved populations.”
Potential Economic Impact
For over 30 years, the CDFI Fund has supported mission-driven lenders in bridging financial gaps in economically distressed areas. In fiscal year 2024 alone, CDFI awardees financed over 109,000 small businesses, supported the construction of more than 45,000 affordable housing units, and originated over $24 billion in loans and investments.
Case studies highlight the fund’s impact. Afena Federal Credit Union in Marion, Ind., used a $590,000 CDFI grant to expand financial coaching and loan services for low-income families. Fort Randall Federal Credit Union in South Dakota utilized a $3.7 million grant to enhance services for Native American communities, opening 35 new accounts in one month for previously unbanked residents.
Uncertain Future for CDFI Funding
The EO directs the Treasury Department to determine the extent to which CDFI programs can continue under statutory authority. Key concerns include whether grant recipients will be allowed to complete ongoing projects and if CDFI-certified institutions will face changes in their certification status.
DCUC has formally requested a meeting with Treasury officials to discuss the EO’s implications and advocate for continued support for military and underserved communities.
“DCUC and its member credit unions remain steadfast in our mission to serve those who serve our country,” said Anthony Hernandez, president/CEO of DCUC. “We stand ready to collaborate with Treasury and policymakers to safeguard financial access for our nation’s military families and low-income communities.”
With uncertainty surrounding the future of CDFI grants, advocacy groups continue to push for transparency and clarity on how the executive order will be implemented. As Treasury deliberates its next steps, credit unions and community lenders remain hopeful that their vital work in economic development will not be disrupted.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
