ICBA shares CDFI track record with Treasury following executive order

Following President Donald Trump’s executive order directing the Treasury Department to eliminate the non-statutory components of the Community Development Financial Institutions Fund, ICBA highlighted the critical role that CDFI community banks play in local economies.

ICBA Letter: In a letter to Treasury Secretary Scott Bessent, ICBA noted that while all community banks are the economic engines of local communities, CDFI community banks are uniquely positioned to serve low- and moderate-income communities, especially in rural areas. The CDFI Fund plays a vital role in ensuring CDFIs can serve these hard-to-reach communities, ICBA said.

CDFI Impact: As Treasury prepares its response to the White House’s EO, ICBA shared data noting that CDFIs:

• Financed more than 252,000 small businesses, creating or maintaining over 2.2 million jobs, in a recent five-year period.

• Provided more than $28 billion in loans and investments in a single year, significantly stimulating local economies.

• Processed more than $34 billion in Paycheck Protection Program loans to support 1.1 million small businesses during the pandemic.

Proven Track Record: “ICBA believes this proven track record is an important context for Treasury as it prepares its response to the White House’s EO,” ICBA Senior Executive Vice President and Chief of Government Relations and Public Policy Anne Balcer wrote. “Time and time again, CDFI community banks have proven to be incredibly effective in leveraging and deploying their capital to hard-to-reach communities that are overlooked by larger financial institutions.”

Background: The White House’s executive order says:

• The non-statutory components and functions of the CDFI Fund—which is housed under the Treasury Department—shall be eliminated to the maximum extent consistent with applicable law.

• The CDFI Fund and other affected entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.

• The head of each affected entity shall submit a report to the Office of Management and Budget confirming full compliance within seven days.

• The Office of Management and Budget or the head of any executive department or agency charged with reviewing grant requests by such entities shall reject funding requests for such governmental entities to the extent they are inconsistent with this order.

Outlook: ICBA will continue actively engaging Treasury and members of Congress to protect the operations of the CDFI Fund. Read ICBA’s letter to Treasury.