On March 21, the U.S. Department of the Treasury submitted a report to the Office of Management and Budget affirming that all 11 programs administered by the Community Development Financial Institutions (CDFI) Fund are required by law.The report includes citations to the specific statutory authorities underlying each program.
The report was in response to a March 2025 executive order aimed at eliminating non-statutory components of various federal initiatives, including the CDFI Fund.The order is a part of a broader administrative effort to reduce the size and scope of the federal government by rescinding programs not explicitly required by law.
In its report, the Treasury outlined several key points in defense of CDFI Fund programs, including that:
- All 11 programs have statutory backing. The Treasury attached citations to the enabling legislation for each CDFI program.
- Statutory language overrides executive directive. The report emphasized that the CDFI Fund is performing its statutory functions required by law and as such should be subject to the executive order.
- There will be ongoing program evaluation. While affirming legality, the Treasury noted that it will continue to explore opportunities for operational efficiency.
Though the White House emphasized that "no final decisions have been made" in regard to the future of the programs, the Treasury's position offers clarity to stakeholders.A bipartisan group of Senators issued a letter urging the Treasury to preserve the programs and emphasized the CDFI Fund's role in providing capital access and oversight.
Putting It Into Practice: The Treasury Department's confirmation that all CDFI Fund programs statutorily-backed provides much-needed clarity for lenders and community-focused institutions following the March executive order.While the administration may continue efforts to reduce the size and scope of federal agencies, the legal foundation of these programs suggests they cannot be eliminated without congressional action.Even so, participants in CDFI Fund programs should keep a close eye on budget negotiations and policy shifts that could impact funding, reporting requirements, and overall program operations.
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