White House’s FY2027 budget proposal includes CDFI funding cuts

The Trump Administration’s FY2027 budget proposal cuts $204.5 million in discretionary awards for the Community Development Financial Institutions (CDFI) Fund.  

“Proposals to reduce funding for the CDFI Fund are concerning at a time when communities across the country are relying on access to safe, affordable financial services. CDFIs play a critical role in expanding economic opportunity, particularly in underserved areas, and any reduction in support risks limiting that impact,” said Scott Simpson, President and CEO of America’s Credit Unions, in response. “We share the President’s focus on revitalizing rural communities. With nearly 900 credit union branches serving as the sole financial institutions in those census tracts, credit unions are often the only access point for financial services and remain committed to reaching underserved communities wherever they are. We look forward to working with Congress to ensure these vital investments remain strong and continue to meet the needs of American families and small businesses.”

America’s Credit Unions has consistently supported full funding for the CDFI Fund, with previous advocacy efforts noting that credit unions generate $12 in private capital for each federal dollar awarded through the program. Last year’s Presidential Budget also aimed to effectively “zero out” the fund. After a diligent education campaign with lawmakers, both the House and Senate ultimately funded the CDFI Fund for FY2026.  

The budget proposal, released Friday, also includes an America’s Credit Unions-opposed administrative fee on lenders participating in the Small Business Administration’s guaranteed business lending programs.

America’s Credit Unions is supportive of proposed funding for the Office of Terrorism and Financial Intelligence, which would expand Treasury’s ability to trace, disrupt, and sanction the financial networks that enable major narcotics trafficking organizations, as well as proposed funding for the Department of Justice’s new National Fraud Division.

“We appreciate the Administration’s focus on combating financial fraud and strengthening national security. Investing in efforts to prevent fraud, combat illicit financial activity, and protect consumers is critical, and credit unions stand ready to be strong partners in that work. At the same time, several elements of the proposal raise concerns for credit unions and the 145 million Americans they support every day,” added Simpson. “[T]he introduction of new administrative fees on lenders participating in Small Business Administration programs risks increasing costs and limiting access to capital for small businesses.

“Credit unions play a vital role in supporting local economies, providing safe and affordable financial services, and helping small businesses grow. Policies that reduce investment in community development or increase the cost of lending could make it more difficult for institutions to support Main Street America,” Simpson concluded. “We look forward to working with Congress and the Administration to ensure the final budget supports access to affordable financial services, protects consumers, and strengthens the communities credit unions serve.”

Working together with League and industry partners, America’s Credit Unions will continue to engage the administration and Congress to advocate on behalf of positive credit union proposals and against cuts that would harm credit unions and the 146 million members they serve nationwide.