A Cruel and Short-Sighted Attack on Low-Income Communities

November 12, 2025

The Trump administration has fired all employees of the Treasury Department's Community Development Financial Institutions (CDFI) Fund, effectively shuttering 11 programs that provide financing to underserved communities nationwide. For thirty years, the CDFI Fund has maintained bipartisan support while facilitating capital access for small businesses, affordable housing, and infrastructure in areas traditionally neglected by conventional banking institutions. The program supported nearly 110,000 businesses and over 45,000 affordable housing units last year alone, mobilizing approximately $300 billion annually through partnerships between public investment and private capital.

Who is affected

Over 100 CDFI Fund employees who have been terminated
Small business owners in low-income and underserved communities
Black entrepreneurs and communities of color facing systemic credit barriers
Rural families and communities lacking traditional financial services
Working families dependent on affordable housing (45,000+ units were supported last year)
Nearly 110,000 businesses that received support last year
Community-based banks, credit unions, and loan funds that partner with the CDFI Fund
Local economies in historically disinvested urban and rural areas

What action is being taken

The Trump administration has eliminated the entire staff of the CDFI Fund
Treasury officials have frozen 11 CDFI programs
Senator Tim Scott and other Republican lawmakers are urging Treasury to release congressionally approved funding
The authors are calling on Congress to act, philanthropy and the private sector to step up

Why it matters

This matters because the CDFI Fund has been one of the federal government's most effective tools for expanding economic opportunity to communities systematically excluded from traditional financial systems. With a proven track record spanning three decades and bipartisan support, the program mobilizes approximately $300 billion annually by leveraging public investment with private capital to support small businesses, affordable housing, and essential infrastructure in underserved areas. The elimination comes at a critical economic moment when Black unemployment is rising, small business loan approvals are declining to pandemic lows, and many communities are still recovering economically, making access to alternative financing mechanisms especially crucial. By dismantling this infrastructure, the decision threatens to deepen existing economic inequalities and signals that access to capital may now depend on political ideology rather than economic need or proven effectiveness.

What's next

Congress should move swiftly to reopen the government and restore staffing to the CDFI Fund
Lawmakers should protect the Fund's statutory programs
Congress should ensure federal investment in CDFIs continues to flow
Philanthropy and the private sector must step up to fill immediate gaps and reaffirm that opportunity should not depend on ZIP code or skin color

Read full article from source: The San Diego Voice & Viewpoint