Senate and House GOP defend community finance fund from Trump cuts

Mark Schoeff Jr., CQ-Roll Call on Oct 27, 2025

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WASHINGTON — Congressional Republicans came out in force Thursday in support of a Treasury Department program that helps provide loans to low-income and underserved populations that traditional financial institutions usually don’t reach.

Treasury indicated earlier this month that it would cut 1,446 positions in a reduction in force related to the partial government shutdown. The department would eliminate the approximately 100-member staff of the Community Development Financial Institutions Fund.

A group of 105 Republican lawmakers called on the Trump administration to preserve the CDFI Fund in a letter to Treasury Secretary Scott Bessent and Office of Management and Budget Director Russ Vought.

“We strongly urge the Administration to continue carrying out the statutory obligations of the CDFI Fund that are essential to ensuring private investments reach our states and districts,” states the letter, which was led by Senate Finance Chair Michael D. Crapo, R-Idaho, and Rep. Young Kim, R-Calif.

“While we understand difficult decisions must be made amid the ongoing Democratic government shutdown and our nation’s unsustainable fiscal trajectory, eliminating all work done by the CDFI Fund will negatively impact our economy long-term,” the lawmakers added.

A Treasury spokesperson didn’t immediately respond to a request for comment.

The letter is the latest example of the bipartisan pushback on Capitol Hill to the administration’s notion of zeroing out the CDFI Fund.

For now, the Treasury has joined other departments and agencies in saying that it would not make the reductions during the shutdown due to a court order stopping them. But the threat to the CDFI Fund remains after President Donald Trump proposed eliminating it in executive order earlier this year.

The CDFI Fund provides funding for community development organizations and local financial institutions that in turn supply capital for projects in economically distressed areas.

“CDFIs play an important role in supporting economic development in rural, tribal and other underserved communities in our states,” the lawmakers wrote.

They said CDFIs are adept at “offering flexible financing tools” that “enhance the viability” of community development projects. They said the CDFI fund has awarded more than $7.4 billion to CDFIs and other institutions, allocated $76 billion in tax credits and guaranteed $2.5 billion in bonds since its inception 30 years ago.

“It is unclear how these programs will continue to operate if the CDFI Fund’s obligations cease to function,” the letter said.

The lawmakers said community development funding also is critical for building new housing and bringing down housing costs.

“The CDFIs and developers who rely on a functioning CDFI Fund are essential to expanding our nation’s housing supply,” they wrote.

They also pointed out that last summer’s wide-ranging tax, border and defense reconciliation legislation contained a provision that made permanent the New Markets Tax Credit Program, a CDFI Fund mechanism, and gave it $5 billion in annual allocation authority.

“Over the duration of the tax credit, NMTC has created over one million jobs, disproportionately in rural America,” the lawmakers said.

They added that the Senate’s version of the National Defense Authorization Act “includes language to improve transparency at the fund” and creates a secondary market to enable CDFIs to send more capital to small businesses.

“We stand ready to work with the Administration to make additional improvements at the Fund to ensure it fulfills its purpose of serving communities left behind by the federal government and the traditional finance sector,” the letter states.

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