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The Trump administration’s move to dismantle the Community Development Financial Institutions (CDFI) Fund is facing strong opposition from Republican and Democratic lawmakers, as well as credit union leaders who say the fund is essential for underserved communities.
President Donald Trump’s executive order, issued late Friday, directs federal agencies to eliminate the CDFI Fund “to the maximum extent” permitted by law. The program has long received bipartisan support for its role in providing capital to small businesses and low-income communities.
“The CDFI Fund is a lifeline for underserved populations to access capital & directly supports multiple Orange County credit unions that serve our community,” Rep. Young Kim (R-Calif.) said on X. “This partnership represents the best of public-private sector collaboration & deserves our continued bipartisan support.”
The move has alarmed key Republican lawmakers, including House Financial Services Chair French Hill (R-Ark.) and Senate Banking Chair Tim Scott (R-S.C.), both of whom have historically backed CDFI funding. Arkansas-headquartered CDFIs have received nearly $188 million since the fund’s inception, while South Carolina-based CDFIs have received over $75 million.
“Chairman Hill knows the impact CDFIs can have on communities, particularly in rural areas,” Hill’s spokesperson Brooke Nethercott said, as reported by Politico. “Our Committee looks forward to learning more from the administration.”
Jim Nussle, president/CEO of America’s Credit Unions, underscored the fund’s significance to credit unions.
“Nearly 500 credit unions are designated as CDFIs and are critical institutions in boosting local economies and securing the American Dream for their members,” Nussle said. “We remain committed to ensuring the Trump Administration, Treasury Department and other key stakeholders understand the importance of the credit union difference.”
Treasury Secretary Scott Bessent acknowledged the fund’s role in economic growth, stating, “CDFIs are a key component of President Trump’s commitment to supporting Main Street America.” However, concerns remain over whether the administration’s order will severely curtail the fund’s reach.
With 92% of congressional districts housing at least one CDFI, opposition to the cuts is mounting. The coming weeks will determine whether the administration’s proposal can withstand bipartisan resistance.
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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.
