The Community Development Financial Institutions Fund (CDFI Fund) boosts economic growth in largely underserved communities that lack traditional access to financing.
The CDFI Fund creates a public-private partnership to promote access to capital. Since 1994, the CDFI sector has grown to more than 1,400 institutions in every state and territory in the nation and leverages at least $8 in private sector investment for every $1 in public funding received.
U.S. Sens. Mark R. Warner of Virginia and Mike Crapo of Indiana, co-chairs of the Senate Community Development Finance Caucus, led a letter to the Trump Administration signed by 23 senators emphasizing bipartisan support for the CDFI Fund and highlighting the fund’s critical role in providing capital to underserved communities.
“Over 1,400 CDFIs represent a significant portion of America’s financial services sector, delivering over $300 billion in financial services each year to urban and rural communities across every state. Each year, CDFIs provide affordable growth capital to over 100,000 small businesses and finance over $100 billion in residential real estate, bringing down the cost of housing through new construction and affordable home mortgages. The important work of the CDFI sector is strengthened by the CDFI Fund, which provides seed funding to new CDFIs, grows the capacity of existing CDFIs, and provides oversight to ensure federal dollars are spent appropriately. Elimination of key CDFI Fund functions would undermine this important progress, including for small businesses and homeowners,” the lawmakers wrote.
Immediately following President Donald Trump’s Executive Order on March 14, Warner and Crapo highlighted the success of the CDFI Fund. Trump’s EO ordered that functions of the Fund be reduced to the minimum required by law. Cuts to the CDFI Fund endanger funding for affordable housing, minority-owned businesses and disaster recovery in low-income areas. In 2022, Warner and Crapo launched the bipartisan Senate Community Development Finance Caucus, focused on coordinating and expanding on public and private-sector efforts in support of the missions of CDFIs. Since its inception, the caucus has grown to 28 members, 14 Democrats and 14 Republicans.
“The CDFI Fund’s public-private partnership model aligns with this administration’s emphasis on ensuring that taxpayer dollars are spent efficiently and with measurable impact. Every federal dollar injected into a CDFI generates at least eight more dollars from private-sector investment. Due in large part to the investments the Trump administration made in the CDFI Fund in 2020, industry assets have tripled and the number of CDFI-certified entities has risen by 40 percent,” the lawmakers state in their letter.
The letter was also signed by U.S. Sens. Chuck Schumer of New York, Tina Smith of Minnesota, Cindy Hyde-Smith of Mississippi, Amy Klobuchar of Minnesota, Roger Wicker of Mississippi, Rev. Raphael Warnock of Georgia, Dr. Bill Cassidy of Louisiana, Chris Van Hollen of Maryland, Mike Rounds of South Dakota, Jack Reed of Rhode Island, Steve Daines of Montana, Gary Peters of Michigan, John Boozman of Arkansas, John Hickenlooper of Colorado, Lisa Murkowski of Arkansas, Ron Wyden of Oregon, Tim Sheehy of Montana, Cory Booker of New Jersey, Jim Justice of West Virginia, Dick Durbin of Illinois and Ruben Gallego of Arizona.
Related stories
Share
Rebecca Barnabi
