WASHINGTON — A bipartisan pair of senators is pressuring key allies of President Donald Trump to release hundreds of millions of dollars in community development funding that they say has been stalled for months, another step in the battle over programs that support lending in underserved rural and urban areas.
In a letter sent Tuesday to Office of Management and Budget Director Russell Vought, who also leads the Consumer Financial Protection Bureau on an acting basis, the senators asked for a spending plan and timeline for deploying $324 million appropriated for the Community Development Financial Institutions Fund. The letter, led by Sens. Mike Crapo, R-Idaho, and Mark Warner, D-Va., warns that delays are hindering critical projects and constraining capital flow to businesses and consumers.
Thirteen Republicans, including Senate Banking Committee Chairman Tim Scott, R-S.C., and thirteen Democrats signed on to the letter.
The pushback from Crapo and Warner, who are cochairs of the CDFI caucus on the Hill, comes as the Trump administration has signaled its intention to cut funding for the community development programs, which have enjoyed strong bipartisan support for more than three decades.
Trump signed an executive order earlier this year calling for the
"To date, the CDFI Fund has yet to announce and disburse awards for five programs within its portfolio even though application periods closed months ago," the lawmakers said in the letter. "Furthermore, other programs have yet to publish applications for the current fiscal year."
While Warner and Crapo don't lay out which programs they're referring to, at least one program — the Bank Enterprise Award program —
The tactics echo budget director Vought's previous advocacy for "pocket rescissions," a rarely used procedure that would allow the president to propose spending cuts late in the fiscal year when Congress has insufficient time to review them. Vought has said the administration intends to use such tools to achieve savings without legislative approval.
The funding uncertainty is particularly problematic for community development financial institutions, which typically leverage federal subsidies with private bank debt to expand their lending capacity. Without the public funding component, these lenders struggle to maintain the equity necessary to access private capital markets.
"CDFIs typically work by taking a dollar of public subsidy and mixing it together with several dollars of bank debt," said Brett Theodos, a senior fellow at the Urban Institute who studies community economic development, previously told American Banker.
The letter is another chapter in the novel battle against CDFI funds, which grew under the first Trump administration and during former President Joe Biden's tenure.
At a Senate Finance hearing last month, Warner pressed Treasury Secretary Scott Bessent about unobligated CDFI dollars, asking for a commitment that the administration would follow the law in deploying fiscal 2025 funds. Bessent promised a response within a week, but Warner's office says it never received a written answer.
"It's against the law to withhold appropriated funds," Warner told Bessent during the exchange.
