WASHINGTON—Ahead of a House Committee on Appropriations subcommittee hearing on the Treasury Department's FY2021 Financial Services and General Government budget request, NAFCU urged the subcommittee to fully fund the Community Development Financial Institutions (CDFI) Fund at its current levels or above.
In the proposed budget, the Trump Administration recommends eliminating the CDFI Fund.
"As the Committee is aware, CDFI programs help promote access to capital and local economic growth in low-income communities," NAFCU Vice President of Legislative Affairs Brad Thaler. "CDFI credit unions predominantly serve low-income areas and other target markets and often are the only financial services options for consumers that live paycheck to paycheck."
"The CDFI Fund grant program helps credit unions serve communities and consumers that large banks do not focus on," Thaler added.
Funding Removed, Restored
In all four of his proposed budgets, NAFCU noted President Trump has tried to eliminate funding for CDFI Fund awards as they "are no longer needed given the maturity of the CDFI industry." Congress has restored funding in all the prior budgets.
The FY2021 budget also does not request appropriations for the Community Development Revolving Loan Fund (CDRLF). Congress provided funding for these two and other programs used by credit unions in the FY2020 government spending packages passed in December; those funds are currently set to expire Sept. 30.