101 Republicans urge administration to save CDFI Fund

• Key insight: Over 100 Republicans, including senior Banking Committee members, signed a letter supporting CDFI Fund after the Trump administration fired the entire staff.
• What’s at stake: Trump ordered the fund dissolved via executive order despite statutory mandate and Treasury Secretary Bessent’s stated support for the program.
• Forward look: Staff layoffs threaten community development lending nationwide, even as the Treasury acknowledged the fund’s legal basis to the budget office.

More than 100 Republicans have signed on to a letter in support of the Community Development Financial Institutions Fund after the Trump administration gutted the program’s staff earlier this month. 

According to a copy of the letter viewed by American Banker, leading GOP lawmakers have added their signatures to the letter, led by Sen. Mike Crapo, R-Idaho — who serves as co-chair of the CDFI caucus in the Senate — and Rep. Young Kim, R-Calif. Those include Sen. Chuck Grassley, R-Iowa, president pro tempore of the Senate, and Senate Banking Committee Chairman Tim Scott, R-S.C. 

Vocal Senate Banking Committee members Sens. Thom Tillis, R-N.C.,  Katie Britt, R-Ala., and Mike Rounds, R-S.D., have also signed on, as well as a number of House Financial Services Committee members, including Rep. Bill Huizenga, R-Mich.  

It’s an impressive showing from Republican lawmakers who’ve been hesitant to publicly challenge the Trump administration, even when it targets programs that they themselves have fought for. 

The CDFI Fund — which enjoys uncommon bipartisan support in Congress — has been one of the biggest unexpected targets of the Trump administration. The White House issued an executive order in March targeting the fund, ordering that it be dissolved to the extent that it was not statutorily mandated. 

The Treasury Department issued a determination to the Office of Management and Budget shortly thereafter that all CDFI Fund programs are, in fact, statutorily mandated. But that didn’t stop the Trump administration from laying off the entire staff of the CDFI Fund earlier this month, saying that doing so was necessary to dissolve the fund. 

“The [Reduction in Force] is necessary to implement the abolishment of the Community Development Financial Institutions, which is based upon the Department of Treasury determination that its programs, projects, and activities do not align with the President’s priorities,” said the RIF notices to Treasury CDFI workers, the text of which was first reported by American Banker.

The Republican lawmakers’ letter comes as the banking industry is also rallying support for the beleaguered program. 

The American Bankers Association, Mortgage Bankers Association, Independent Community Bankers of America and other groups sent a letter to the Treasury Department earlier this week urging the agency to preserve the program and the federal workers who implement it, arguing that the administration’s efforts to enhance program efficiency “should not be undercut by the loss of the experienced professionals who are key to implementing them.”