ABA, Trade Groups Remain Opposed to ‘Rescission’ Cuts to CDFI Funding

In a continuing effort, the American Bankers Association and three other trade groups today urged Senate leadership to oppose the Trump administration’s revised $14.7 billion rescissions proposal, which would seek to claw back $23 million from the Bank Enterprise Award Program and $141 million from the Capital Magnet Fund. Under the rescissions process, the president can propose to rescind budget authority for unspent funds. “The administration has characterized the items in the rescission package as unspent money that was unused and not needed; and thus no harm would be done by clawing back the money,” the groups wrote. “This is not accurate.”

The groups noted that BEA announcements were imminent, and that banks had already prepared extensive applications for the $23 million in awards, which enable small banks in distressed communities to finance small business, affordable housing, neighborhood revitalization and responsible consumer financial services. The BEA program has been the principal federal funding program for community development financial institution banks in recent years.