WASHINGTON–President Trump’s proposed 2018 budget proposes a “restructuring” of the Consumer Financial Protection Bureau and eliminates the Community Development Financial Institution Fund, but also assumes the credit union tax exemption will remain in place for at least the next 10 years.
The $4.1-trillion budget for 2017 includes deep cuts in a number of programs, especially those that are aimed at lower-income Americans, and assumes 3% economic growth, which economists have already said is extremely unlikely.
The CDFI Fund has been consistently in the cross-hairs of the Trump Administration, which targeted it for cuts early on. Congress, however, has been inclined to provide money for the CDFI Fund, including $248 million in the recently passed bill to fund government operations. As of January 31, 2017, there were 287 credit unions certified as CDFIs.
In a statement following release of the president’s budget, which is really just a guide for what the administration wants since Congress controls the national purse-strings, NAFCU CEO Dan Berger said the association is “pleased that President Trump’s budget proposal does not single out the credit union tax exemption for elimination, and we will continue to work with Congress and the administration to protect the exemption throughout the tax reform process.”
“The association also supports CFPB reforms such as bringing the bureau under the congressional appropriations process, which the budget proposals suggest,” Berger added. “However, we believe that cutting the CDFI Fund and CDRLF grant programs would be a mistake. CDFI credit unions predominately serve low-income areas and other target markets and are often the only financial services option for consumers that live paycheck to paycheck. The CDFI Fund grant program helps these credit unions better serve their communities, which are often overlooked by other financial institutions.
Banker Response
In its statement, the Independent Bankers Association of America (ICBA) said it was urging Congress to ensure needed funding for farm bill, crop insurance and guaranteed Business and Industry loan programs. ICBA noted the president’s budget proposes a challenging level of agriculture-related budget cuts that would threaten farmers and rural communities at a time of increasing financial stress in the farm sector.
“ICBA appreciates the administration’s efforts to rein in spending and put us on a path towards a balanced budget,” ICBA President and CEO Camden R. Fine said in a statement. “However, the USDA’s projection for net farm income this year is slightly over $62 billion, about one-half of the peak in 2013. Farm bill programs, crop insurance, guaranteed farm loans, Business and Industry loans and other rural development programs all play an important part in ensuring a strong farm safety net.”