- Details
- By Brian Edwards
- Finance
The U.S. Department of Treasury has reportedly affirmed that its Community Development Financial Institutions (CDFI) Fund will continue operating normally, easing some concerns about potential disruptions stemming from a Trump administration executive order that threatened to dismantle the agency office.
Treasury officials wrote that the “CDFI Fund programs and related activities are statutorily authorized. The CDFI Fund is operating as normal and does not anticipate any disruptions to the programs,” according to a statement received on Friday by the Native CDFI Network from the White House Office of Intergovernmental Affairs. “Senior leadership at Treasury has consistently expressed support for CDFIs,” the statement concluded.
The Treasury's assurance of normal operations came on the deadline day for 2025 CDFI program and Native American CDFI Assistance (NACA) program applications and a week after the CDFI Fund announced it had received applications requesting $19.2 billion in requests under the New Markets Tax Credits program allocation authority—nearly double the $10 billion available.
Trump’s executive order, signed late in the evening on March 14, directed the CDFI Fund and six other federal entities to “eliminate all non-statutory components” and reduce operations “to the minimum presence and function required by law.” The White House issued the order just hours after the president had signed a budget bill that maintained funding for the CDFI Fund at its 2024 level of $324 million, including $28 million for the NACA program.
The apparent contradiction raised immediate concerns in Indian Country about potential impacts on the 69 Treasury-certified Native CDFIs that provide financial services in underbanked Native and rural communities.
Pete Upton, CEO of the nonprofit Native CDFI Network, had warned that any reduction to the CDFI Fund would be “a devastating blow to economic self-sufficiency in Indian Country.”
The Native CDFI Network and Native CDFI intermediary Oweesta Corporation responded with a joint letter co-signed by 84 Native CDFIs and Indian Country partners expressing their opposition to the executive order. The letter argued that Native CDFIs help the federal government fulfill its trust and treaty obligations to tribal nations and noted that CDFIs are safe investments, with a default rate on their loans of 0.36% in 2023 — roughly half the rate of traditional banks.
“The letters have been hugely helpful,” a senior government official, speaking on background, told Tribal Business News.
Congressional support has played a significant role in protecting the fund. On March 19, a bipartisan group of 23 senators sent a letter to Treasury Secretary Scott Bessent reaffirming their support for the CDFI Fund.
The letter highlighted the fund's economic impact, noting that over 1,400 CDFIs deliver more than $300 billion in financial services annually across every state, with each federal dollar generating at least eight more dollars from private-sector investment.
“A reduction in the functions and operations of the CDFI Fund will have a corresponding impact on CDFI-certified entities and local communities and we urge you to avoid this unfortunate outcome,” the senators wrote.
Beyond the letter, the executive order has faced strong bipartisan resistance in Congress, including unusually vocal pushback from Republicans. As Politico reported, Rep. Young Kim (R-Calif.) called the CDFI Fund “a lifeline for underserved populations to access capital,” while noting that 60 percent of CDFI physical offices are located in Republican-held districts.
While the Treasury statement indicates no current disruptions, it's unclear whether this assessment covers the long-term future of the CDFI Fund or if Treasury is still evaluating which components might be considered “non-statutory” under the executive order's requirements.
Unlike other entities targeted by the order, such as the Institute for Museum and Library Services, where employees were reportedly locked out of their offices and placed on administrative leave, the CDFI Fund continues to operate normally at this time.
Tribal Business News reached out to the Treasury for comment, but had not heard back at the time this story was published.
