CDFIs Get a Budget Boost, Despite Trump's Threat to Cut
Congressional negotiators this weekend reached a FY2017 funding deal that would provide a $15 million increase for the Community Development Financial Institutions program, despite President Trump’s desire to kill it.
The funding measure, totaling some 1,600 pages, would fund most government programs through Sept. 30. While the legislation would boost defense and immigration enforcement programs, it would not provide funds for the Trump Administration’s controversial plan to build a wall along the Mexican border.
The House and Senate are scheduled to vote on the legislation this week—before the current short-term Continuing Resolution funding much of the federal government expires.
The bill calls for $248 million for the CDFI program for FY 2017. In his FY 2018 budget blueprint, Trump proposed eliminating the program, saying it had outlived its usefulness.
In FY2016, the CDFI program received $233.5 million.
The legislation also would require the Office of Management and Budget to prepare a report on the cost and regulatory burdens posted by the Dodd-Frank Act. The House Financial Services Committee is scheduled tomorrow to mark up legislation that would overhaul Dodd-Frank.
Credit union trade groups said it is clear that their grass roots lobbying on the CDFI Fund paid off.
“Together our advocacy efforts reinforced with Congress the impact high return credit unions generate on the CDFI Fund’s investment,” the National Federation of Community Development Credit Unions said, in a statement.
“CUNA, the leagues, credit unions and consumers sent a powerful message that these institutions perform vital functions in their communities, and we thank legislators for fully funding them,” said CUNA President/CEO Jim Nussle.
"NAFCU strongly supports the CDFI Fund and the Community Development Revolving Loan Fund, each of which provides low-income designated credit unions critical funding to meet the needs of members in economically distressed communities," said N
The community development federation said that community development credit unions leverage $12 of private capital for every $1 of public investment.
Established in the Riegle Community Development and Regulatory Improvement Act of 1994, the CDFIs are designed to encourage private investment, the supply of capital, credit and other development services in economically distressed areas.
The CDFI provides money for financial assistance and technical assistance in areas where there is a shortage of affordable financial services.
The program is not out of the woods yet, since Trump’s FY 2018 budget calls for no funding for the program.
“As Congress begins to look ahead to the next fiscal year, it is essential we continue the momentum to ensure CDFIs are funded in the future,” Nussle said.