WASHINGTON—The dispute over the future of the CDFI Fund appears to reflect an internal ideological divide within the Trump Administration, rather than a short-term political bargaining tactic, according to one Washington observer.
Asked whether the layoffs of CDFI Fund staff were being used as leverage to pressure Democrats to end the government shutdown, America’s Credit Unions Senior Vice President of Advocacy Greg Mesack, said, the situation “looks more like an ideological struggle between two wings of the Administration.”
“Treasury Secretary Scott Bessent and his team have shown they value the CDFI Fund and have worked to keep its programs moving forward,” Mesack noted during a call with the media Monday, pointing to the agency’s efforts to modernize applications and release funding rounds before the shutdown. “By contrast, OMB Director Russell Vought and his allies have made clear they don’t believe in the CDFI Fund and think the government would be better off without it.”
Mesack added the CDFI Fund is too small to serve as a meaningful bargaining chip in budget negotiations.
“In the grand scheme of government funding, it’s not large enough to force Democrats to the table,” they said.
Instead, the dispute has prompted some Republican lawmakers to show open support for the Fund, such as Sen. Mike Crapo (R-ID) and Rep. Young Kim (R-CA) and others circulating letters to reaffirm that many in the Republican Party still strongly support the CDFI Fund, Mesack noted.
The comments come amid ongoing uncertainty for CDFI employees, who remain on unpaid furlough or have received reduction-in-force (RIF) notices as part of the administration’s shutdown strategy. Both the Defense Credit Union Council and ACU have been lobbying for the Fund to continue and CDFI staff to retain their jobs.