As the Senate reviews the Treasury Department's fiscal year 2027 budget request Wednesday, credit union advocates pressed lawmakers to preserve full funding for the Community Development Financial Institutions Fund.
In separate letters to the Senate Appropriations Subcommittee on Financial Services and General Government, both the Defense Credit Union Council (DCUC) and America's Credit Unions warned that proposed cuts could significantly impact underserved communities.
The Trump administration's proposal would reduce CDFI funding to roughly $119.5 million, down from $324 million, and restructure the program, eliminating several existing funding streams. DCUC urged lawmakers to reject the cuts, noting the fund supports services such as small-dollar loans, financial education and lending for veteran-owned businesses in military communities.
America's Credit Unions echoed those concerns, pointing to the program's track record in financing small businesses, affordable housing and economic development nationwide. The group also warned that restructuring could disrupt established funding pipelines and delay assistance reaching communities.
Both organizations emphasized that credit unions play a critical role in deploying CDFI resources, particularly in areas lacking traditional banking access.
In addition to funding concerns, the groups called for improved program execution, citing lengthy award timelines and complex application processes that can burden smaller institutions.
The hearing is expected to influence congressional appropriations decisions in the coming months.
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