WASHINGTON— House Democrats are urging Treasury Secretary Scott Bessent to exempt the Community Development Financial Institutions (CDFI) Fund from a recent executive order that mandates reduced operations, ABA Banking Journal reported.
The order, issued by President Trump in March, instructs the CDFI Fund and other federal programs to scale back staffing and activities to only what is required to fulfill their statutory duties.
In a letter first reported by Politico, Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, along with 89 other Democratic lawmakers, called on Bessent to shield the CDFI Fund from the directive. They rejected the idea that any part of the fund or the CDFIs it supports is “unnecessary.”
“For more than 30 years, across Republican and Democratic administrations, the CDFI Fund has been a bipartisan success, providing grants, technical assistance, and other support to community banks, credit unions and loan funds across the country that are certified as CDFIs,” the lawmakers said in the letter. “These CDFIs leverage a relatively small amount of federal funds to provide financial access to underserved communities that traditional financial institutions ignore.”
While Bessent has publicly acknowledged the CDFI Fund’s vital role in expanding access to capital and supporting Main Street businesses, lawmakers expressed concern over the apparent contradiction between his statements and the administration’s executive order, ABA Banking Journal added.
“If the president shares your view and truly supports CDFIs, the logical step would be to amend the executive order to exclude the CDFI Fund and collaborate with Congress to strengthen and grow its work,” the letter concluded.