Treasury Secretary Scott Bessent today faced questions from senators on both sides of the political aisle about the administration’s proposed budget cuts for the Community Development Financial Institutions Fund, with Bessent accusing the program of having pursued a partisan agenda.
The White House’s proposed budget for fiscal year 2027 calls on Congress to trim the CDFI Fund’s budget by $204.5 million, or roughly two-thirds of the program’s current budget. It would instead redirect remaining CDFI Fund awards to rural communities “where the awards are most beneficial.”
Appearing before the Senate Appropriations Committee, Bessent said he supported the proposed appropriation for rural communities. He also alluded to recent changes in CDFI Fund awards made by the Treasury Department, which last year announced it would modify the fund’s New Market Tax Credits program allocations to ensure compliance with federal anti-discrimination laws and increase monitoring of award recipients.
“We want to make sure it is doing what is designed to do and not loaded with a partisan wish list,” Bessent said. “We also make sure that the CDFI program is free of waste, fraud and abuse.”
Earlier this month, a bipartisan group of 43 senators asked their colleagues to set aside at least $324 million for the CDFI Fund and required the funds to be released in a timely manner. During the hearing, committee member Sen. Deb Fischer (R-Neb.) pointed to what she said was the good work of the 11 CDFIs in her state.
“They take on the risks to serve those who otherwise are often overlooked or who cannot be served by bigger financial institutions,” she said.
