CDFI Fund cuts would ‘dramatically narrow’ financial lifelines for underserved
The Treasury’s Community Development Financial Institutions (CDFI) Fund has numerous far-reaching benefits to underserved communities and should be fully funded. Responding to President Donald Trump’s FY2026 budget proposal, which includes a $291 million reduction in the CDFI Fund’s discretionary awards, America’s Credit Unions President/CEO Jim Nussle outlined the fund’s impact and urged full funding in a letter to Treasury Secretary Scott Bessent Tuesday.
The communities affected by this potential reduction would include urban neighborhoods, tribal lands, and many suburban communities that rely on CDFIs for affordable capital and basic financial services. Credit union CDFIs turn the fund’s resources into tangible community benefits that strengthen net worth ratios, keep members away from predatory lenders, and housing and small business financing in areas traditional lenders overlook.
Nussle encouraged Bessent to:
- Publicly reaffirm Treasury’s support for the full range of CDFI Fund programs, not only rural initiatives.
- Work with the Office of Management and Budget and congressional appropriators to restore funding for Financial Assistance, Technical Assistance, Native Initiatives, and the Capital Magnet Fund in the final FY 2026 budget.
- Continue engaging with industry stakeholders, including credit unions, to ensure any new rural program complements rather than supplants existing tools.
The letter also notes Bessent’s support of CDFIs during his January confirmation testimony, where he noted “CDFIs are a key component of Main Street prosperity and a priority for this Treasury,” and his March statement to Congress affirming that “CDFI Fund programs are statutory and central to job creation and wealth building.”
America’s Credit Unions also wrote a letter to the House Appropriations Subcommittee on Financial Services and General Government Tuesday for Bessent’s hearing before the committee.