Trump speeds effort to scrap CDFI grants
WASHINGTON — The Trump administration has sped up its plan to shut down the Treasury Department’s grant programs for community development financial institutions.
In an Excel spreadsheet sent late last week to the appropriations committees on Capitol Hill, the administration listed a number of programs it wants to cut as soon as possible, including the CDFI grants.
In the document, the administration proposes to “entirely eliminat[e] funding for the CDFI Fund's four discretionary grant programs, for which no awards have yet been made.”
The CDFI grants have helped banks, particularly in rural communities, extend small-dollar loan programs to underserved populations. In a high-level budget proposal released earlier this month, the Trump administration had already expressed an interest in placing them on the chopping block. That sparked immediate opposition from industry and consumer groups, which said the cuts would hurt low-income communities, including ones that voted overwhelmingly for Trump in the election.
Whether lawmakers will follow through on the Trump administration's request remains to be seen.
“That is a decision by the White House. I think those are tough calls. Whether that is the right thing to do, we will look into it. A lot of things got cut in that budget,” Rep. Blaine Luetkemeyer R-Mo., said in an interview. “Priorities have to be made and there is a lot of other lending institutions out there that can fill that void.”
Support for CDFI funds has been a rare point of agreement between bankers and progressives.
“CDFI has played an important role in rural and urban communities,” said Sen. Sherrod Brown, D-Ohio.
This more detailed proposal would freeze any incoming applications process, said Jeannine Jacokes, the chief executive and policy adviser at the Community Development Bankers Association.
“The CDFI fund currently has an application window open for the CDFI financial assistance program,” Jacokes said. “What it would do is it would basically stop the current application round.”
The issue also came up during a Senate Banking Committee hearing earlier Tuesday.
Deyanira Del Rio, co-director of the New Economy Project and a board member of a credit union, described why she felt the program was important to maintain.
“There is a misunderstanding about what the CDFI does," Del Rio said. "It does not make grants. It is not charity. It is capital grants, capital investments into institutions that then get leveraged at $12 to $23 for every dollar of CDFI invested."
"These infusions of capital are critical to enable us to meet the loan demand in our communities," Del Rio said.