U.S. Capitol building. (Source: Shutterstock)
Democratic House Appropriators are proposing to provide the Community Development Financial Institutions Act with $300 million in FY20—a 20% boost over the current funding level.
The proposal is contained in a draft Financial Services appropriations bill to be marked up in subcommittee Monday night.
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The draft bill also, for the first time, would require that $10 million in CDFI funds be set aside for loss loan reserves for short-term, small-dollar loans made by qualifying institutions.
Federal law established that set-aside as an alternative to predatory payday loans, but it never has been funded. The House Financial Services Committee requested the funding earlier this year.
President Trump has repeatedly called for elimination of the CDFI program, which is operated by the Treasury Department. The administration has argued that the program has achieved its purpose and that private funding is available to make up the funding that would be lost.
However, Congress has rejected that plan each year during the Trump Administration. Earlier this year, Treasury Secretary Steven Mnuchin conceded that the administration had not conducted any research in determining that the program no longer was needed.
And he added, that, given congressional support, the administration would consider its position.
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