The Treasury Department today proposed new rules to prevent Community Development Financial Institutions Fund awards from being used to support individuals in the U.S. illegally. It also announced that CDFIs will be required to adopt policies aligning with the Trump administration’s anti-discrimination priorities, and the fund will review those policies for compliance.
According to a Treasury Department statement, the proposed rulemaking will state that certain benefits are “federal public benefits” under the Personal Responsibility and Work Opportunity Reconciliation Act. “Accordingly, illegal aliens and other non-qualified aliens would not be eligible to receive these benefits funded by the American taxpayers,” it said.
The Treasury Department also announced that it is adding a new provision to CDFI Fund agreements to ensure certified CDFIs do not engage in practices that violate federal anti-discrimination laws.
“Certified CDFIs will be required to adopt, implement and maintain policies and procedures reasonably designed to ensure compliance with these requirements, certify annually as to the existence and administration of those policies and procedures, and make them available for review upon request by the CDFI Fund,” it said.
Noncompliance with the revised agreements will lead to the CDFI Fund “to vigorously exercise its remedies,” including possible termination of CDFI status, the Treasury Department said.
The proposed changes come after the Treasury Department announced last year that it would modify the fund’s New Market Tax Credits program allocations to ensure compliance with federal anti-discrimination laws. The department also said it would increase monitoring of award recipients.
OMB to release FY2025 funds
In related news, the Office of Management and Budget plans to release $289 million in fiscal year 2025 funds to the CDFI Fund, according to the Community Development Bankers Association. The move comes after the White House released a proposed budget for fiscal year 2027 that calls on Congress to trim the CDFI Fund’s budget by $204.5 million, or roughly two-thirds of the program’s current budget.
