"An executive order President Donald Trump signed on Friday, calling for the federal Community Development Financial Institutions (CDFI) Fund and other agencies to be 'eliminated,' targets the economic lifeblood of America's rural communities.

When big banks turn away from small towns and rural communities—finding them unprofitable to serve—community banks step in to provide the credit and capital that families and small businesses desperately need. For three decades, many of these community banks have depended on the CDFI Fund, which enables them to serve the economically distressed communities that Wall Street won't lend to."

"President Donald Trump’s aggressive government cost-cutting agenda is forcing his Treasury chief to balance support for that mission with efforts to protect a crucial financial lifeline for millions of low-income Americans...

'I urge political leaders on both sides of the aisle to ensure the CDFI Fund can carry out its mission at full capacity,' Randell Leach, CEO of California-based CDFI Beneficial State Bank, said in a statement. 'The financial wellbeing of millions of Americans and the vibrancy of neighborhoods across our country depend on it.'"

"Republican lawmakers are expressing apprehension over a plan by the Trump administration to gut federal spending on a program some have called a 'lifeline' for small businesses in districts and states they represent...

'The CDFI Fund and its programs are fully authorized,' said Jeannine Jacokes, CEO of the Community Development Bankers Association. But she said the group is 'concerned about any potential staffing cuts, and you know, unclear what the impact of this executive order is.'"

"The Trump administration is targeting a federal program that subsidizes small banks in some of the poorest communities across the country, particularly in red states, as part of a wider White House push to reduce the size of government.

An executive order signed by President Donald Trump late Friday aims to shrink the Community Development Financial Institutions Fund, which supports more than 1,400 smaller lenders operating in rural and urban areas that aren’t adequately served by larger banks. The program has injected billions of dollars into these lenders through grants, tax credits and bond guarantees."

"'There's not a whole lot of fat here to cut,' said Graham Steele, a fellow at the Roosevelt Institute who until recently oversaw the CDFI program under the Biden administration as the Treasury Department's assistant secretary for financial institutions. 'Pretty soon you're hitting bone...'

Groups representing CDFIs said that because the bulk of the CDFI programs are authorized through Congress and backed up by continual funding in appropriations bills, the funding should continue — at least from a legal standpoint. 

'If they look at what's actually in the statute and what the CDFI Fund is actually doing, the CDFI Fund is fine,' said Jeannine Jacokes, chief executive officer of the Community Development Bankers Association."

"Until this week, the industry financed in part by the CDFI Fund had been a bipartisan darling of public-private partnership. CDFIs are a type of financial institution certified by Treasury to specialize in community lending and affordable housing finance. CDFIs play a particularly crucial role in rural and tribal communities.

The tiny CDFI industry took on a larger role amid the Covid-19 pandemic after policymakers realized that many business owners of color were not receiving emergency funding. 'They can’t do work like this without the CDFI Fund,' said Jeannine Jacokes, CEO of the Community Development Bankers Association."