The Trump administration’s decision to eliminate the entire staff of the Treasury Department’s Community Development Financial Institutions (CDFI) Fund is more than bureaucratic reshuffling — it’s an assault on one of the most effective and bipartisan vehicles for community investment in America. With a single order, the administration has frozen 11 programs that deliver lifelines to small businesses, working families, and neighborhoods across the nation.
For three decades, the CDFI Fund has quietly powered economic opportunity in places where traditional finance rarely reaches — from rural towns to historically disinvested urban communities. Through community-based banks, credit unions, and loan funds, it helps small business owners secure capital, supports affordable housing, and finances essential infrastructure. Since 2009, the CDFI fund has supported more than $298 billion in loans and investments through over 20 million transactions, financing over 1.3 million businesses and nearly 560,000 affordable housing units nationwide. Last year alone, nearly 110,000 businesses and over 45,000 affordable housing units were supported. CDFIs are the backbone of many local economies, especially in Black, Latino, Native, and low-income communities that continue to face systemic barriers to accessing credit.
A bipartisan success story undone
This work has never been partisan. Created under President Bill Clinton and strengthened by both Republican and Democratic administrations, the CDFI Fund has long enjoyed broad support on Capitol Hill. When the White House recently proposed eliminating it, even conservative leaders such as Senate Banking Chair Tim Scott joined a bipartisan group of senators urging Treasury to release its congressionally approved funding. Their message was simple: CDFIs are indispensable partners in ensuring that economic growth reaches every corner of America.
Yet despite this consensus, more than 100 CDFI Fund employees have now been terminated. Treasury officials claim the action “aligns with the President’s priorities” — a chilling phrase that reveals how ideological battles are being waged at the expense of everyday Americans. With no staff, there is no one to process funding applications, manage compliance, or administer programs like the New Markets Tax Credit, which Congress just made permanent as part of the “One Big Beautiful Bill.”
Crippling a network that works
We have seen firsthand the impact of the CDFI Fund’s investments in strengthening communities across the country — helping to close the opportunity gap that undermines America’s economic competitiveness and providing ladders into the middle-class. CDFIs are not ideological experiments — they are logical, market-based tools for building wealth in communities that have long been locked out of opportunities for prosperity. They leverage public dollars with private capital, multiply their impact through partnerships, and operate with financial discipline and accountability. To gut the infrastructure making this possible is to cripple a network that works.
From our vantage point, this decision is not only cruel, it is economically reckless. It undermines decades of bipartisan progress toward inclusive growth. It tells Black entrepreneurs, rural families, and small business owners that their economic futures are expendable. And it signals that the federal government’s commitment to fair access to capital now depends on political winds rather than shared American values.
Fewer voices will be at the table
At the Joint Center, we often say that when we are not in the room, things don’t tend to go better for us. The dismantling of the CDFI Fund is a textbook example. Removing the infrastructure that brings investment to poor and marginalized communities ensures that fewer voices will be at the table when economic recovery is designed — and that recovery will be narrower, more unequal, and less sustainable.
The timing could not be worse. Black unemployment, which had reached historic lows in recent years, climbed above 7% in August. Small businesses that survived the pandemic are still rebuilding, but their loan approval rates have slowed to their lowest point since the pandemic. And many local economies are contending with higher borrowing costs and reduced federal support. In this context, dismantling the nation’s community finance apparatus is not fiscal prudence; it is willful neglect.
What congress must do now
Congress has a duty to act. Lawmakers should move swiftly to reopen the government and restore staffing to the CDFI Fund, and protect its statutory programs. They should ensure that federal investment in CDFIs continues to flow and that these institutions can operate free from ideological interference. Philanthropy and the private sector, too, must step up — both to fill immediate gaps and to reaffirm the principle that opportunity should not depend on ZIP code or skin color.
The CDFI Fund represents one of the government’s best ideas: that targeted public investment can unlock private enterprise, strengthen communities, and expand shared prosperity. Few programs can claim the success of nearly $300 billion mobilized annually, millions of jobs supported, and thousands of communities transformed. To dismantle it now is to turn our backs on that record of proven success.
America’s future depends on more than tax cuts and deregulation — it depends on inclusive growth, strong local economies, and a financial system that works for everyone. That’s what CDFIs make possible. And that’s what we stand to lose if this decision is allowed to stand.
Dedrick Asante-Muhammad is the President and CEO of the Joint Center for Political and Economic Studies–America’s Black Think Tank. Eric Morrissette is a Senior Fellow at the Joint Center and a former Acting Under Secretary of Commerce for the Minority Business Development Agency.
This article first appeared in Word in Black.