Community leaders condemn President's executive order cutting CDFI funding

The U.S. House Committee on Financial Services convened on March 25, 2025, to discuss the critical role of community development financial institutions (CDFIs) in expanding access to capital across America. A significant focus of the meeting was the recent executive order issued by the President, which aims to eliminate much of the CDFI fund, a move that has raised concerns among committee members and community advocates.

CDFIs are specialized institutions dedicated to providing financial services and capital to low-income individuals and communities, particularly in the realm of affordable housing. During the meeting, representatives highlighted the substantial impact CDFIs have had in various regions, including Alabama, where they reported an economic impact of over $18 million. These institutions have been instrumental in addressing the housing crisis by facilitating investments in both urban and rural areas.

Committee members emphasized the effectiveness of the CDFI Fund, noting that for every dollar awarded, recipients typically leverage it into eight dollars from other funding sources. Over the past decade, the CDFI Fund has financed more than half a million affordable housing units, 42,000 commercial real estate projects, and provided significant personal and small business loans.

The discussion underscored the importance of CDFIs in fostering economic growth and stability in underserved communities. Members expressed concern that the proposed cuts to the CDFI fund would hinder efforts to improve access to capital for those who need it most, questioning how the committee could effectively address capital access issues while such funding is at risk.

As the debate continues, the future of CDFIs and their ability to support vulnerable communities remains uncertain, highlighting the need for ongoing advocacy and support for these vital financial institutions.