$289M in 2025 CDFI funds released; Treasury to add rules, restrictions to awards

Following months of coordinated, bipartisan advocacy reaffirming the value of the Community Development Financial Institutions (CDFI) Fund, the Office of Management and Budget (OMB) Thursday announced it will release the $289 million appropriated to the fund. However, the Treasury Department also announced plans to issue rules and add restrictions to CDFI awards to ensure compliance with federal laws.

America's Credit Unions, Leagues, Inclusiv, credit unions, and other industry partners are consistent advocates for the value and impact of the CDFI Fund. America’s Credit Unions, the American Association of Credit Union Leagues, and all state leagues called on Treasury and OMB to disburse the nearly $290 million in CDFI Fund appropriations for FY2025 last September. America's Credit Unions has also cautioned against added requirements that could delay the release of awards and create uncertainty for applicants, including credit unions, while raising questions about how certain disclosures could influence the allocation of funding.

“The release of these funds is critical for the communities and families that rely on CDFIs every day. These awards, approved during the FY2025 funding round, can now move forward and begin delivering real impact. America's Credit Unions, Leagues, Inclusiv, credit unions, and other industry partners were relentless in our advocacy for their release, both with members of Congress and the Administration, and we appreciate the bipartisan leadership that helped make this happen," said Scott Simpson, America's Credit Unions president/CEO.

“Earlier budget proposals moved to eliminate funding for the CDFI Fund altogether. Instead, Congress reaffirmed its support for community-based lending and preserved critical resources that help people access affordable financial services.

“At the same time, we are reviewing the new requirements tied to these awards. It is important that implementation supports, not complicates, the ability of these institutions to serve their communities.

“Today’s funding is welcome, but the work is not done. We will continue working with policymakers to ensure the CDFI Fund remains strong, stable, and focused on expanding opportunity in the Main Street communities that need it most.” 

The association is currently urging Congress and the Administration to fully fund the CDFI Fund for FY2027, following the president's proposal to cut its awards. 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.  

Treasury's announcement indicated forthcoming rules concerning the treatment of CDFI Fund awards under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), to ensure compliance with federal law and that taxpayer-funded federal public benefits are not diverted to subsidize non-lawful residents.

In addition, Treasury's release detailed a new provision to relevant CDFI Fund agreements to ensure certified CDFIs do not engage in practices that violate federal anti-discrimination laws. Certified CDFIs will be required to adopt, implement, and maintain policies and procedures to ensure compliance with federal anti-discrimination laws.

The association most recently raised concerns about the General Services Administration’s (GSA) proposed changes to System for Award Management (SAM) certifications that could create new challenges for federal financial assistance applicants.

Amid the government shutdown, more than 100 lawmakers signed on to a letter reaffirming the value of the CDFI Fund and urging the Administration to “continue carrying out the statutory obligations of the CDFI Fund that are essential to ensuring private investments reach our states and districts.”

As of Jan. 13, credit unions make up 446 of the 1,383 certified CDFIs nationwide, the largest depository institution type. Every CDFI dollar granted to a credit union generates $12 in private investment, including new storefronts, renovated homes, and revitalized Main Streets. CDFI credit unions have invested $85 billion in community mortgage lending, $91 billion in local consumer financing, $30 billion in lending to local businesses, and $18 billion in affordable small-dollar loans and alternatives to payday loans.