Credit Unions to Fight Trump Plan to Eliminate CDFI Program
Credit union trade groups Thursday vowed to fight President Trump’s plan to kill the Community Development Financial Institutions Fund (CDFI) program, as proposed in the administration’s FY2018 budget plan.
“The Administration's dramatic reduction of funding to the CDFI Fund will negatively impact its stated goal to invest in America's infrastructure,” Cathie Mahon, CEO of the National Federation of Community Development Credit Unions. “CDFIs are one of the most effective mechanisms to channel capital into under-resourced communities.”
The federation represents more than 280 credit unions that are certified as CDFIs. They serve more than 7.4 million members in 46 states and have combined assets of more than $70 billion. Mahon said CDFI credit unions leverage more than $12 in private sector funds for every $1 in public money.
Officials from CUNA and NAFCU also said that they are longtime supporters of the CDFI and will fight to ensure that the program continues to be funded.
Trump’s budget plan, entitled “America First: A Budget Blueprint to Make America Great Again,” would make huge cuts in domestic programs to fund a $54 billion boost in defense spending. The State Department budget would be cut by more than 25 percent, with even larger cuts coming in the Environmental Protection Agency.
Programs such as the Legal Services Program and the endowments for the arts and humanities would be eliminated.
And so would the CDFI, which the Trump Administration said would save $210 million, based on figures in the Continuing Resolution now funding much of the government.
The federation had been seeking $250 million for the program.
“The CDFI Fund was created more than 20 years ago to jump-start a now mature industry where private institutions have ready access to the capital needed to extend credit and provide financial services to underserved community,” Trump said in his budget.
As an incoming president, Trump did not produce a regular budget blueprint, instead outlining his priorities as a guide for House and Senate appropriators. Presidential budgets are non-binding documents that simply outline an administration’s priorities. They often are ignored by Congress, regardless of whether the president has majorities in the House and Senate.
The CDFI Fund was established in 1994 and was designed to ensure that underserved communities have access to financial services.
It provides financial assistance and technical assistance to certified CDFIs and emerging financial institutions.