WASHINGTON—Treasury Secretary Scott Bessent defended the Trump Administration’s proposed deep cuts to the Community Development Financial Institutions Fund on Wednesday, telling senators the program had “lost its way” and accusing parts of it of pursuing a “partisan agenda,” even as lawmakers from both parties pressed him to explain why the administration wants to slash a program many view as critical to underserved and rural communities, American Banker reported.
Testifying before the Senate Appropriations Subcommittee on Financial Services and General Government on the FY27 Treasury budget request, Bessent said he supports a new $100-million rural initiative and argued the administration wants to refocus remaining CDFI dollars on rural lending after the White House proposed cutting the fund by $204.5 million—roughly two-thirds from current levels. The Administration’s budget blueprint says remaining awards should be directed to rural communities “where the awards are most beneficial,” American Banker said.
The comments drew immediate pushback from senators on both sides of the aisle. American Banker reported Sen. Chris Coons (D-DE) questioned the wisdom of cutting more than $200 million from the fund, while Sen. Deb Fischer (R-NB) highlighted the work of CDFIs in her state, saying they support rural businesses, housing and tribal communities that larger institutions often do not serve. The bipartisan concern mirrors broader industry opposition after the White House again targeted the fund in its FY27 budget.
For credit unions, the fight remains highly relevant because both America’s Credit Unions and the Defense Credit Union Council entered the hearing urging senators to preserve full CDFI funding, with ACU calling for the fund to be maintained at $324 million—the FY26 level—and DCUC likewise asking appropriators to reject cuts as they weigh Treasury spending.