Newsweek
Republicans Urge Treasury to Keep 'Critical' Fund After Trump Order
By Mandy Taheri and Gabe Whisnant
The Trump administration's move to cut funding for Community Development Financial Institutions Fund (CDFI), which helps expand access to capital is facing strong bipartisan backlash, with Republicans joining over a dozen Democrats in warning that the decision could deeply harm underserved communities.
Newsweek has reached out to the Treasury's press team for comment via email on Thursday.
Why It Matters
Republican lawmakers have backed the majority of Trump's executive orders during his second term, often at odds with Democrats.
The letter is a key symbol of bipartisan support for CDFIs and a notable pushback against the president.
What To Know
On March 14, Trump signed an order reducing "the elements of the Federal bureaucracy that the President has determined are unnecessary," which included CDFIs.
The financial entity provides services to underserved communities, including low-income individuals who may not have easy access to banking services. CDFIs increase access to capital for some marginalized groups and support affordable housing projects, among other initiatives.
Less than a week after his order, a bipartisan group of senators, 13 Democrats and 10 Republicans, issued a letter to Treasury Secretary Scott Bessent reiterating their support for "CDFI Fund, its operations and the critical role it plays in the communities it serves."
In the March 19 letter, the senators urged the administration to consider reversing course on Trump's Friday decision, arguing that eliminating the CDFI program would make homeownership less accessible for first-time buyers and underserved communities.
The letter states that"Over 1,400 CDFIs represent a significant portion of America's financial services sector, delivering over $300 billion in financial services each year to urban and rural communities across every state," arguing that "elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners."
The statement concludes that: "More distressed communities are being served by CDFIs than ever before, more first time buyers are receiving the financing they need to purchase a home, more community facilities are being built, and more commercial loans are reaching entrepreneurs. A reduction in the functions and operations of the CDFI Fund will have a corresponding impact on CDFI-certified entities and local communities and we urge you to avoid this unfortunate outcome."
The letter was spearheaded by Republican Senator Mike Crapo and Democratic Senator Mark Warner, co-chairs of the Senate Community Development Finance Caucus.
The following senators signed on: Senators Chuck Schumer, Tina Smith, Cindy Hyde-Smith, Amy Klobuchar, Roger Wicker, Raphael Warnock, Bill Cassidy, Chris Van Hollen, Mike Rounds, Jack Reed, Steve Daines, Gary Peters, John Boozman, John Hickenlooper, Lisa Murkowski, Ron Wyden, Tim Sheehy, Cory Booker, Jim Justice, Dick Durbin, and Ruben Gallego.
What People Are Saying
Senator Mark Warner, a Virginia Democrat, wrote in a Wednesday X, formerly Twitter, post: "CDFIs do essential work ensuring Americans have access to banks. Protecting them has always been a bipartisan priority. Trump is trying to dismantle that."
Senator Mike Crapo, an Idaho Republican, wrote in a Thursday X post: "The important work of the CDFI sector is strengthened by the CDFI Fund, which provides seed funding to new CDFIs, grows the capacity of existing CDFIs, and provides oversight to ensure federal dollars are spent appropriately. Elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners."
Representative Young Kim, a California Republican, said on X on March 18: "The CDFI Fund is a lifeline for underserved populations to access capital & directly supports multiple Orange County credit unions that serve our community. This partnership represents the best of public-private sector collaboration & deserves our continued bipartisan support."
Opportunity Finance Network, a national network of CDFIs, wrote in an X post on Thursday: "CDFIs and opportunity for all Americans - nonpartisan, common ground."
Jim Perry, a community bank specialist, wrote on X on March 18: "Trump's executive order severely limiting the Treasury's Community Development Financial Institution Fund has thrown the industry into confusion as financial companies try to quantify the damage."
What Happens Next
It is unclear if bipartisan pressure will impact the order.