The proposed White House budget for the coming fiscal year would change the mission of the Community Development Financial Institutions Fund, with the Trump Administration accusing the fund and CDFIs of advancing a “woke” agenda.
The proposed budget would strip the CDFI Fund’s ability to allocate discretionary awards, with the administration saying that award factors such as advancing racial equality “framed American society as inherently oppressive rather than fostering unity.” It instead proposed $100 million to create a Rural Financial Award Program, with 60% of CFDI loans and investments going to rural communities.
The Trump administration has previously given mixed signals about the future of the CFDI Fund. President Trump in March issued an executive order directing the fund to reduce its personnel and operations to the minimum to needed to perform its statutory duties. That was followed by a statement from Treasury Secretary Scott Bessent in which he said that CDFIs are “a key component of President Trump’s commitment to supporting Main Street America in the pursuit of job growth, wealth creation and prosperity.”
Congress is currently drafting a budget reconciliation bill, which may or may not include the White House proposals. The CDFI Fund opened the fiscal year 2025 funding round in January, with plans to distribute approximately $348 million in awards, pending final congressional appropriations.
