The U.S. Capitol
Two of the credit union industry's largest trade organizations are urging senators to reject proposed cuts to the Community Development Financial Institutions (CDFI) Fund, arguing the reductions would weaken financial services access in underserved and military-connected communities nationwide.
In separate letters submitted ahead of a Senate Finance Committee hearing with Treasury Secretary Scott Bessent, both America's Credit Unions and the Defense Credit Union Council (DCUC) called on lawmakers to preserve the CDFI Fund's current $324 million funding level and reject a Trump administration proposal that would reduce funding to approximately $119.5 million in fiscal year 2027, a 63% cut.
The proposal would eliminate funding for several CDFI programs, including the Native American CDFI Assistance Program, Small Dollar Loan Program, Bank Enterprise Award Program and Healthy Food Financing Initiative.
America's Credit Unions emphasized the CDFI Fund's track record of leveraging private capital and expanding financial inclusion. The group noted that credit unions make up 446 of the nation's 1,383 certified CDFIs and serve more than 19 million people through over 2,800 branches. CDFI credit unions serve 40% of all rural counties and 25% of persistent poverty counties nationwide.
DCUC highlighted the fund's importance to military communities, arguing that CDFI-backed credit unions use the resources to provide emergency small-dollar loans, affordable housing financing, veteran entrepreneurship support and financial readiness services in communities often overlooked by larger institutions.
Both organizations also expressed concerns about Treasury administration of the fund, citing delays in award disbursements and proposed policy changes that could complicate access to funding. They urged Congress to pair continued funding with stronger oversight, streamlined application processes and greater transparency regarding how funds are distributed.
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