WASHINGTON— The Community Development Financial Institutions (CDFI) Fund’s budget would be reduced to $278 million—a reduction of $46 million--under the House fiscal year 2024 financial services and general government (FSGG) funding bill released by the House Appropriations Committee.
In addition, the bill would provide $3.5 million for the NCUA’s Community Development Revolving Loan Fund (CDRLF), which is the same level as this year.
President Biden’s 2024 budget proposal included $341 million for the CDFI Fund – a 5% increase from the 2023 enacted level – and $4 million for the CDRLF.
House Republicans have indicated they will pursue budgets below the levels that were agreed upon in the debt ceiling package, which could “complicate the appropriations process as both chambers work through funding issues,” NAFCU noted.
Sens. Steve Daines (R-MT) and Mark Warner (D-VA) were among the legislators expressing support for additional transparency at the CDFI Fund, according to the report. The comments were made during a Senate Banking, Housing, and Urban Development markup of legislation.
Amendment Added, Withdrawn
Daines made an amendment—and later withdrew it—that would require annual testimony before Congress from the CDFI Fund, according to CUNA.
“CDFIs fund great investments in businesses and nonprofits around the country, but we’re hearing about a lack of responsiveness and transparency in the program from key stakeholders,” Daines was quoted as saying, pointing to the current moratorium on new applications as an example.
Warner—who co-chairs the Community Development Finance Caucus—said there is bipartisan support on the committee that the CDFIs are a “piece of the financial sector that needs more attention,” and pledged to work with Daines on solutions, CUNA said.
Funding for CFPB
In addition, CUNA noted the bill would fund the Consumer Financial Protection Bureau (CFPB) through the appropriations process and replace the single director with a bipartisan, five-member commission, both priorities the credit union trade associations championed.
“We fully support the bill’s reforms to the Consumer Financial Protection Bureau, which would provide additional transparency and accountability to the bureau,” CUNA President/CEO Jim Nussle said in a statement. “However, we strongly encourage the committee to increase funding levels for the Treasury’s Community Development Financial Institutions Fund. The fund is and extremely good use of federal funds, as it leverages those dollars into real differences for communities. We’re disappointed Congress would propose a nearly $46 million cut at a time when communities are struggling.”
Additional Provisions
CUNA noted the bill also contains provisions to prohibit:
- The CFPB from using funds to enforce its section 1071 rule.
- Funding for FinCEN to promulgate the beneficial ownership reporting rules that do not reflect Congressional intent.
- Funds for the Federal Housing Finance Agency to charge good credit borrowers with higher fees on their home loan.
- Funds to be used to establish a U.S. Central Bank Digital Currency or discontinue paper currency as the U.S. legal tender.
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