WASHINGTON — The Bush Administration has broken with its prior policy and has sought an appropriation for the U.S. Treasury Department's Community Development Financial Institutions Fund. In previous years the Administration has sought to eliminate the program, but in the budget for fiscal year 2008 the administration sought $29 million for the Fund.

The money would be spent on Administration ($12 million), Financial Assistance ($15 million) and Technical Assistance ($2 million), the Administration said. The CDFI Coalition, an organization of financial institutions that supports the Fund, praised the Administration for not seeking to eliminate the Fund, but pointed out that $29 million is not enough. "While the President did acknowledge the value of CDFIs in the budget proposal, $29 million is woefully insufficient funding and would limit the work of CDFIs nationwide," the Coalition said. "The CDFI Coalition is opposed to the cut of CDFI Fund grant programs." The Coalition argued that CDFI Fund grant programs have worked well for the CDFI industry–enabling CDFIs to expand the availability of credit, capital and financial services to hundreds of distressed communities across the country.

"The proposed funding cuts will undoubtedly result in fewer federal resources available for community development activities including those conducted by CDFIs," the Coalition said.

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Clifford Rosenthal, executive director of the National Federation of Community Development Credit Unions, which is a founder of the CDFI Coalition, praised the Administration's change of policy even though the appropriation amount was small.

"While the 2008 budget figure is low, over the past few years the House and Senate have supported the CDFI Fund with appropriations of about $55 million despite the zeroing-out proposed by the President," Rosenthal said. "We're hopeful of a similar outcome this year and we welcome the Administration's recognition of the value of the CDFI Fund–it's a real breakthrough." –[email protected]

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