The National Association of Affordable Housing Lenders (NAAHL) and other banking trades are voicing their support for the Community Development Financial Institutions (CDFI) Fund amid reports that the agency’s staff has been laid off.
The CDFI Fund administers key community development and affordable housing programs, including the Capital Magnet Fund, the CDFI program, and the New Markets Tax Credit.
“Banks rely on CDFIs to reach low- and moderate-income communities, other hard-to-reach communities such as rural and Tribal communities, and frankly communities that lack other financial institutions and options for their residents and businesses,” said Sarah Brundage, president and CEO of NAAHL. “It’s a business model that channels private investments into what communities need—whether that be rebuilding from a natural disaster, health care facilities, a robust small business economy, or more affordable homes for seniors, families, veterans, and hard-working community members. It’s a partnership that works.”
According to Politico, the Trump administration recently terminated all employees at the Treasury Department’s CDFI Fund.
NAAHL, American Bankers Association, Mortgage Bankers Association, and other organizations stressed the critical role of the CDFI Fund in a joint letter to Treasury secretary Scott Bessent and Office of Management and Budget director Russell Vought this week.
“Its programs are invaluable in helping banks and other lenders meet community credit needs, create jobs, and build local wealth,” said the organizations.
Earlier this month, a judge with he U.S. District Court for the Northern District of California granted a temporary restraining order blocking most agencies from moving ahead with their layoffs.
Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, and other lawmakers have also voiced their opposition to cutting the CDFI Fund.
“Donald Trump and his budget director, Russell Vought, are using the government shutdown, caused by Trump’s refusal to talk to Democrats, as a cover to advance the radical Project 2025 agenda and undermine hard-working American families and the programs they rely on,” Waters said in a statement. “Their unprecedented and unconstitutional attempt to fire all the CDFI Fund staff at the Treasury Department will effectively shutter the program by leaving no one to carry out its statutory mission and deploy previously appropriated funds. The CDFI Fund is a congressionally mandated program that the president has no power to eliminate. Additionally, Congress has already provided hundreds of millions of dollars for the fund to deliver through credit unions, community banks, and loan funds to underserved communities across the country.”