Republican and Democratic lawmakers expressed support for the Community Development Financial Institutions Fund following media reports that the Trump administration has laid off the program’s staff.
The Office of Management and Budget reportedly sent reduction-in-force notices to CDFI Fund staff informing them that their positions are being terminated as the program’s mission is inconsistent with President Trump’s priorities. The White House has proposed eliminating the fund’s ability to allocate discretionary awards, with the administration stating that award factors such as advancing racial equality “framed American society as inherently oppressive rather than fostering unity.”
Sen. Mike Crapo (R-Idaho) — who co-chairs the bipartisan Senate CDFI Caucus with Sen. Mark Warner (D-Va.) — told Politico that he was discouraged about the firings, “and I’m hopeful that we can get that turned around.” Sen. Mike Rounds (R-S.D.) told the publication that he fully supports the CDFI Fund and that “CDFIs do an excellent job in particular areas” and he’s “seen it firsthand in South Dakota.”
The CDFI Fund was created by Congress and is funded through congressional appropriation. Warner raised questions about the legality of the firings in a call with reporters, according to American Banker.
“The idea that an OMB director can just unilaterally lay off its entire staff seems to me to go completely against the law and the purpose of the law,” Warner said.
In a statement, House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) called the firings “unprecedented and unconstitutional,” and said committee Democrats will oppose the OMB’s decision.
“Without this much-needed program, people in rural and urban communities alike will lose access to the capital and other essential resources that only CDFIs provide,” she said.
Court temporarily blocks firings
In related news, a federal judge in San Francisco today issued a temporary restraining order preventing the Trump administration from firing more than 4,000 federal workers during the government shutdown, including staff at the Treasury Department, which houses the CDFI Fund.
Two unions representing federal workers — the American Federation of Government Employees and the American Federation of State, County and Municipal Employees — filed a lawsuit arguing that the OMB violated the law by threatening to fire federal workers during the shutdown. U.S. District Court Judge Susan Illston granted the plaintiffs a temporary restraining order preventing the administration from enforcing the layoffs, labeling the OMB action “both illegal and in excess of authority and is arbitrary and capricious,” according to NPR.
The Trump administration has argued the court lacks jurisdiction to consider the case.
