WASHINGTON — Community development financial institutions should be protected from the president’s budget cuts, Rep. Keith Ellison, D-Minn, argued Tuesday.
Speaking during a hearing on de novo institutions, Ellison lamented proposed budget cuts, agreeing with industry stakeholders who have said they would hurt many people who voted for President Trump.
“I don't know how you say you're going to help working people across America and eliminate the CDFI fund,” Ellison said during the House Financial Services Committee hearing.
Ellison, who in 2015 introduced a bill to increase CDFI lending levels, noted that many smaller financial institutions have grown to rely on these funds. “They are really important sources for small-business lending,” he said.
It is a rare point of agreement between the financial services industry and Democratic lawmakers. Speaking at the hearing, Keith Stone, president and CEO of The Finest Federal Credit Union, said his $5 million-asset institution was in its first year of operating as a CDFI.
“Those funds are very important to us,” said Stone, speaking on behalf of the National Association of Federally-Insured Credit Unions. "The funds we may receive would be used to offset certain expenses, including some regulatory/compliance burdens.”
Last week, four bank industry groups — the American Bankers Association, the Community Development Bankers Association, the Independent Community Bankers of America and the National Bankers Association — drafted a joint letter urging the Trump administration to maintain the funds, which were singled out for elimination in an initial budget proposal.
“We are gravely concerned that the Administration’s forthcoming FY 2018 budget may propose cuts to the CDFI Fund,” they wrote. “We strongly urge you to maintain strong funding levels.”
Backers of stronger financial regulation agreed.
“Congress can take an important step towards serving Main Street by making sure that CDFIs can continue to serve communities often overlooked by larger institutions,” said Sarah Edelman, the director of housing policy at the Center for American Progress, who appeared at the hearing.