An executive order signed by President Donald Trump could effectively shutter the U.S. Treasury’s Community Development Financial Institutions Fund, which allocates millions each year to local nonprofits.
On March 14, Trump ordered the heads of several government agencies to identify ways to reduce bureaucracy. That includes eliminating all non-statutory components and cutting back staff to a minimum of several programs. Both initiatives would affect the Community Development Financial Institutions Fund.
The CDFI fund was created by Congress in 1994 as a bipartisan measure that included technical and financial assistance for local CDFIs to offer small business loans, grants, new market tax credits and several other programs.
Senate Minority Leader Chuck Schumer said CDFI’s fill the gaps in lending where capital might not be available for residents looking to buy a home, start or expand a small business, improve their local Main Streets, finance affordable housing and hospitals, and more. Schumer is now leading a bipartisan coalition of senators to call on the Trump administration to preserve this vital fund.
Senator Schumer said, “The Trump administration just unwisely put Upstate NY’s Main Street lending on the chopping block, something that will hurt new families trying to buy homes and entrepreneurs starting and expanding small businesses. The CDFI fund is used from Buffalo to Albany to help NY families buy homes, grow their small businesses, improve healthcare, and rebuild our Main Streets, and taking it away would be a disaster. It could blow a $5 billion dollar hole in New York’s community lending sector, raising costs and cutting off loans and investment for anyone who doesn’t have access to big banks.”
The CDFI Fund supports CDFI lenders in their mission to provide small businesses and housing and community development projects with capital investment unavailable in their local economies. Each year, CDFIs provide affordable growth capital to thousands of small businesses and finance over $100 billion in residential real estate, bringing down the cost of housing through new construction and affordable home mortgages. Schumer said the elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners. In New York, CDFIs have supported hospital renovations, affordable housing conversions, projects bringing fresh food to local communities, small business expansions, and more.
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