A pair of letters — one signed by a handful of powerful banking and housing industry associations, the other by a posse of more than 100 Republican lawmakers — landed with a thud on the desks of two of President Donald Trump’s most powerful advisers this week.
The letters urgently requested U.S. Department of the Treasury Secretary Scott Bessent and White House Office of Management and Budget Director Russell Vought to retrieve the Community Development Financial Institution (CDFI) Fund from the waste basket of federally downsized agencies and programs it landed in two weeks ago when the Trump administration fired thousands of federal workers amid the ongoing government shutdown.
“The Community Development Financial Institutions (CDFI) Fund has long stood as one of the federal government’s most effective, market-based strategies for fostering economic opportunity and expanding homeownership in low- and moderate-income communities,” the industry associations’ letter stated. Signatories to the letter included the Mortgage Bankers Association, the American Bankers Association and the National Association of Affordable Housing Lenders.
The Republican lawmakers’ letter reminded Bessent and Vought that “President Trump’s first administration worked with Congress to make historic investments into the CDFI community.” It added that the lawmakers “stand ready to work with the administration to make additional improvements at the Fund to ensure it fulfills its purpose of serving communities left behind by the federal government and the traditional finance sector.”
The CDFI Fund appeared to be a surprising target of the Trump administration. Trump first moved to dissolve the fund — housed at the Treasury Department and established on a bipartisan basis through the Riegle Community Development and Regulatory Improvement Act of 1994 as a method of injecting federal dollars directly into underserved communities — in a March executive order, “to the minimum presence and function required by law.”
The executive order prompted Bessent to issue a reminder to Vought a week later that the CDFI Fund and its associated programs are statutorily mandated.
CDFIs are financial institutions designated by the Treasury Department to receive access to certain federal grant programs, reduced financing and tax credits to support development and investment in traditionally underfinanced communities.
“It is unclear how these programs will continue to operate if the CDFI Fund’s obligations cease to function,” the Republican lawmakers noted, citing the $7.4 billion in direct funding to CDFIs, community development organizations and financial institutions, $76 billion in tax credits and $2.5 billion in guaranteed bonds the fund has provided over three decades.
The signature bipartisan Senate housing reform bill, recently passed as an amendment to the National Defense Authorization Act of 2026, awaits reconciliation with the House of Representatives’ version. It directly calls for expansion of many CDFI programs.
The viability of many provisions in that bill, dubbed the Renewing Opportunity in the American Dream (ROAD) to Housing Act of 2025, seems highly uncertain given the administration’s efforts to undermine the CDFI’s longstanding efforts to renew such opportunities.
“With over half of all CDFIs being depository institutions, sustaining the Fund’s full operational capability will also protect the stability of key segments of the federally insured financial system,” the industry associations wrote. “We greatly appreciate your leadership, your commitment to strengthening the CDFI Fund and your consideration of this matter.”
