news

Today, Congresswoman Veronica Escobar (TX-16) joined Representatives Maxine Waters (CA-43) and Bill Foster (IL-11) and 120 House Democrats in sending a letter to U.S. Department of the Treasury Secretary Scott Bessent and White House Office of Management and Budget Director Russell Vought, expressing grave concern about the Trump Administration’s unlawful attempt to terminate staff at the Community Development Financial Institutions (CDFI) Fund amid the ongoing Republican government shutdown.

In the letter, the lawmakers underscore how for decades, communities across the country have benefited from the CDFI Fund, whose success has been made possible through the dedicated staff who have been essential to carrying out its statutory programs and functions. These public servants have helped CDFIs — including hundreds of community banks, credit unions, and loan funds — navigate rigorous certifications and applications, manage grants, and ensure funds reach the communities that need them most. Despite the Fund’s decades of proven success, the Trump Administration has repeatedly targeted the work of the CDFI Fund this year, delaying and even forcing reapplications for hundreds of millions of dollars in awards that community financial institutions leverage to provide financial access to consumers and small businesses. They go on to warn that firing CDFI staff would be reckless and would threaten the CDFI Fund’s core mission of expanding access to capital, especially to underserved groups and areas that have been historically and systemically shut out by traditional financial institutions.

The letter can be found in its entirety below and here.

”We write to express our deep concern at the attempt by the Trump Administration to unilaterally terminate all of the Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) staff as it pursues illegal “reductions in force” during the government shutdown. The CDFI Fund and the community financial institutions they serve are an essential and vital source of capital and financial services to underserved communities across the United States that traditional financial institutions historically don’t serve as well, including in urban and rural communities.

“For more than 30 years, across Republican and Democratic Administrations, the CDFI Fund has been a bipartisan success, providing grants, technical assistance, and other support to community financial institutions across the country that are certified as CDFIs. During the pandemic, Democrats and Republicans worked with the Trump Administration to ensure CDFIs could serve as a lifeline to consumers and small businesses in underserved communities across the country. For example, after the first round of Paycheck Protection Program (PPP) loans went to preferred customers of the largest banks, Congress set aside $60 billion for CDFIs and other community lenders to help deploy PPP to truly small businesses in underserved communities. Congress subsequently worked with the Trump Administration to provide $12 billion in capital investments and grants for CDFIs and minority depository institutions (MDIs). These funds are estimated to boost lending by at least $130 billion to underserved communities over the next decade.

“Today, there are 1,376 community financial institutions certified as Community Development Financial Institutions (CDFIs) that are located in all 50 states, the District of Columbia, Guam, and Puerto Rico. These include 352 community banks, 444 credit unions, and 567 loan funds.6 Last year, CDFI Fund recipients financed more than 109,000 businesses, provided funding for more than 45,000 affordable homes, and originated almost $24.5 billion in loans and investments. CDFIs are vital to Main Street prosperity. Moreover, the New Markets Tax Credit program implemented by the CDFI Fund has contributed more than $81 billion in tax credit awards to projects that include investment in manufacturing facilities, educational centers, and hospitals. The sudden, inexplicable loss of this critical funding conduit could mean a decades-long recovery for impacted communities, as they seek to replace CDFI Fund dollars that are typically leveraged more than 8 times by private funding. 

“Experienced, knowledgeable CDFI Fund staff support certified CDFIs, which are often very small community lenders, in completing the CDFI recertification and program award application processes. Furthermore, before the shutdown, the Trump Administration needlessly held up the delivery of hundreds of millions of dollars of previously appropriated CDFI awards, and then issued an updated application, forcing applicants to potentially adjust their application within a short period without having staff on hand to help. We ask that all applicants have a fair opportunity to access these funds. Going forward, without experienced staff being available to answer questions and help these institutions navigate the recertification process that must be completed by year-end, delays may cause investors to look to other opportunities, undermining the public private partnership that has supported so many communities gain financial access to credit. 

“The CDFI Fund and CDFIs it supports have contributed for more than 30 years to addressing many difficult investment challenges that other financial institutions lack the capacity or ability to resolve. As some of us have recently noted, this reckless attempt to fire all of the public servants who administer the CDFI Fund flies in the face of what leaders of the Trump Administration have acknowledged about the importance of CDFIs. The outcry of alarm at this attempted gutting of the CDFI Fund and the show of support for the work of the CDFI Fund has been broad and bipartisan. 

“While this misguided move has been rightfully challenged in court, it is imperative that you not wait to take action to rescind this unlawful attempt to undermine the CDFI Fund immediately. Doing so will help ensure that CDFIs and the communities that depend on them across the country will continue to thrive now and, in the years, to come.”