Bipartisan letter pushes back against Trump order eliminating Community Development Financial Institutions (CDFI) Fund
WASHINGTON – U.S. Senators John Hickenlooper, Mike Crapo, Mark Warner, and 20 of their Senate colleagues recently sent a bipartisan letter to the Trump administration voicing strong support for the Community Development Financial Institutions Fund (CDFI Fund) and its critical role investing in communities that face barriers to traditional capital.
The letter comes after President Trump signed an executive order last Friday directing the federal government to eliminate the CDFI Fund, which supports financial institutions that lend to underserved communities.
“Each year, CDFIs provide affordable growth capital to over 100,000 small businesses and finance over $100 billion in residential real estate, bringing down the cost of housing through new construction and affordable home mortgages,” the senators wrote.
“…In sum, more distressed communities are being served by CDFIs than ever before, more first-time buyers are receiving the financing they need to purchase a home, more community facilities are being built, and more commercial loans are reaching entrepreneurs. A reduction in the functions and operations of the CDFI Fund will have a corresponding impact on CDFI-certified entities and local communities and we urge you to avoid this unfortunate outcome,” they concluded.
Hickenlooper sits on the Senate Committee on Small Business & Entrepreneurship where he has prioritized legislation that increases access to capital in underserved communities including his Investing in all of America Act and Supporting Community Lenders Act.
Full text of the letter is available HERE and below:
Dear Secretary Bessent,
We write to reaffirm our bipartisan support of the CDFI Fund, its operations and the critical role it plays in the communities it serves. We appreciate your recent statement recognizing how the CDFI Fund and CDFIs are integral to the Administration’s pursuit of job growth, wealth creation and prosperity.
Federal support for the CDFI mission began in 1994, with enactment of the bipartisan Riegle Community Development and Regulatory Improvement Act. Since its inception over three decades ago, the CDFI Fund has proven critical to the CDFI sector’s growth and has met the mission to create a public-private partnership to promote access to capital in our most underserved urban and rural communities.
Over 1,400 CDFIs represent a significant portion of America’s financial services sector, delivering over $300 billion in financial services each year to urban and rural communities across every state. Each year, CDFIs provide affordable growth capital to over 100,000 small businesses and finance over $100 billion in residential real estate, bringing down the cost of housing through new construction and affordable home mortgages. The important work of the CDFI sector is strengthened by the CDFI Fund, which provides seed funding to new CDFIs, grows the capacity of existing CDFIs, and provides oversight to ensure federal dollars are spent appropriately. Elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners.
The CDFI Fund’s public-private partnership model aligns with this Administration’s emphasis on ensuring that taxpayer dollars are spent efficiently and with measurable impact. Every federal dollar injected into a CDFI generates at least eight more dollars from private-sector investment. Due in large part to the investments the Trump Administration made in the CDFI Fund in 2020, industry assets have tripled and the number of CDFI-certified entities has risen by 40 percent.
In sum, more distressed communities are being served by CDFIs than ever before, more first-time buyers are receiving the financing they need to purchase a home, more community facilities are being built, and more commercial loans are reaching entrepreneurs. A reduction in the functions and operations of the CDFI Fund will have a corresponding impact on CDFI-certified entities and local communities and we urge you to avoid this unfortunate outcome.
Thank you for your consideration of our request. We stand ready to work with your Administration to promote policies that deliver opportunity and prosperity to all Americans.
Sincerely,
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