The CDFI Briefing
- Mike Beall, CUDE, Chief Experience Officer
- Apr 3
- 15 min read
Updated: 1 day ago
Policy and Legislative Updates for Credit Unions
April 3, 2025
Latest Update:
EPA Continues to Provide No Evidence of Fraud or Abuse in GGRF Program
Judge Tanya Chutkan of the United States District Court for the District of Columbia criticized Justice Department attorneys in an April 2 hearing as part of the case brought by Climate United to release frozen Greenhouse Gas Reduction Fund (GGRF) award funds, saying “here we are, weeks in, and you’re still unable to proffer me any evidence with regard to malfeasance.”
She noted that the E.P.A. has offered “different positions” to justify its actions without actually presenting evidence of waste, fraud or abuse. Chutkan has also questioned whether the EPA acted lawfully in freezing the money in Citibank accounts without a court order.
The EPA has been moving away from its claims of malfeasance on the part of GGRF recipients, arguing instead that it has an inherent “right to breach” contracts it enters into.
Inclusiv, one of five recipients of a Clean Communities Investment Accelerator (CCIA) award under the GGRF umbrella, filed a lawsuit on March 31 against the EPA and Citibank, seeking release of its awarded funds.
Update March 28:
Treasury’s Response to OMB Shows all CDFI Programs are Legally Required
Good news in the form of the report submitted by the Treasury Department to the Office of Management and Budget (OMB) in response to the March 14 Executive Order aimed at eliminating "non-statutory" elements of seven federal programs, including the CDFI Fund. The brief one-page report, made available today, verifies that all 11 CDFI Fund programs are legally required and continue to perform their statutory functions.
The Treasury response referenced the statutes authorizing each program while stating that it would continue to operate while seeking efficiency improvements.
As reported in previous updates of the CDFI Briefing, the EO was met with a swift bipartisan response from CDFI industry groups and members of Congress as well, with Senators Mark Warner (D-VA) and Mike Crapo (R-ID), co-chairs of the Senate Community Development Finance Caucus, authoring a letter in support of the Fund’s programs signed by 23 Senators.
Update March 26:
Treasury Recommendations in Response to Executive Order Not Yet Released, but Informal Indications of Support Continue
While there has been no official release of the Treasury’s response to the March 14 Executive Order, Politico has reported that Rep. Bill Huizenga of Michigan, the Republican Vice-Chair of the US House Committee on Financial Services, has stated he’s been in touch with the Trump Administration and has received assurance that “the language [of the executive order] allows support to the CDFIs to continue and there’s a lot of discretion.”
The Defense Credit Union Council (DCUC) is continuing to communicate with Treasury Secretary Bessent’s office, sending a follow up letter this week stressing the importance of transparency and timeline communication. Chief Advocacy Officer Jason Stverak requested any developments be shared with stakeholders, so that they can “understand the direction of policy and plan accordingly.”
Update March 21:
Treasury Affirms Support for the CDFI Fund in Response to Executive Order
Earlier today the Native CDFI Network received a communication from the White House Office of Intergovernmental Affairs within the Executive Office of the President. It affirmed the U.S. Department of Treasury’s continuing support of the CDFI Fund in the wake of last Friday’s Executive Order by President Trump. Beyond support, the message indicates that the CDFI Fund should expect to operate as normal and that we shouldn’t expect disruptions to any of its programs. The message reads as follows:
“The CDFI Fund programs and related activities are statutorily authorized. The CDFI Fund is operating as normal and does not anticipate any disruptions to the programs. Senior leadership at Treasury has consistently expressed support for CDFIs.”
More details will be forthcoming, but this is a crucial win for Community Development Financial Institutions. We will continue to update with information as it becomes available.
Update: March 20
23 Senators Sign Letter to Trump Administration in Show of Bipartisan Support for the CDFI Fund
Senators Mark Warner (D-VA) and Mike Crapo (R-ID), co-chairs of the Senate Community Development Finance Caucus, have reaffirmed bipartisan support for the CDFI Fund in a letter to the Trump administration. Signed by 23 senators, the letter highlights the Fund’s critical role in delivering capital to underserved communities and fueling economic growth.
The senators emphasized that CDFIs provide over $300 billion in financial services annually, financing small businesses, homeownership, and community development projects. The letter warns that reducing CDFI Fund support would jeopardize these efforts and undermine financial access for small businesses and homeowners. It also underscores the efficiency of the CDFI model, which aligns with the administration’s goal of maximizing taxpayer impact—generating an eightfold return on public investment. With CDFI industry assets having tripled and certified institutions growing by 40% since 2020, the senators urged the administration to maintain strong support for the fund to continue expanding economic opportunities nationwide.
Update March 20:
EPA Temporarily Blocked from Clawing Back Obligated Funds in Climate Grants
Climate United Fund and the two other National Clean Investment Fund (NCIF) awardees were granted a temporary restraining order March 17 by Judge Chutkan, preventing the EPA from reclaiming $20 billion in climate grants, including those awarded to Climate United Fund and other National Clean Investment Fund recipients. The ruling halts the EPA’s termination efforts due to a lack of legal justification, keeping funds in grantee accounts while further court proceedings unfold.
Inclusiv and other clean energy hubs awarded funds in both the NCIF and Clean Communities Investment Accelerator (CCIA) voiced strong support for Climate United’s efforts, recognizing this decision as a crucial step toward restoring grant funding. Importantly, Judge Chutkan’s order suggests a potential pathway to fully reinstating the funds, which would allow credit unions and other community lenders to continue financing energy-saving projects that create jobs and drive economic growth.
Update March 18:
CDFI Advocacy Alert Fact Sheet and Webinar Recording Available Now
CU Strategic Planning held a webinar on March 17, addressing President Trump’s executive order that threatened the CDFI Fund, along with six other organizations. The webinar had nearly 300 participants and included an overview of the current situation, insights into what could be considered statutory and non-statutory functions of the Fund, and advice on actions to take this week to show Congress and the Trump administration the importance of the CDFI Fund and the critical role that CDFIs serve in the American economy.
We have made available a fact sheet that provides outreach tips, key information and who to contact. The webinar recording and summary is also available for those who were unable to attend.
Immediate response is crucial, as the heads of the organizations affected by the EO have a deadline of the 21st to respond to the Office of Management and Budget. We urge all CDFI credit unions to contact their members of Congress to stress the statutory authority of the CDFI Fund and the impact it has on communities across the country.
Update March 18:
Treasury Secretary Bessent Gives Statement About Importance of CDFIs
Treasury Secretary Bessent provided a response to an inquiry from the Defense Credit Union Council about to the March 14 executive order:
“This Administration recognizes the important role that the CDFI Fund and CDFIs play in expanding access to capital and providing technical assistance to communities across the United States,” Bessent stated in his response to DCUC. “CDFIs are a key component of President Trump's commitment to supporting Main Street America in the pursuit of job growth, wealth creation, and prosperity. As required by President Trump's March 14, 2025, executive order, the Treasury Department will provide a response to the Director of the OMB on this matter and looks forward to future engagement with CDFIs and other stakeholders to strengthen the impact of these statutory programs and incentivize economic opportunities for all Americans."
Update: March 16
CDFI Funding Advocacy Alert: Executive Order Targets CDFI Fund
Congress and the Trump administration provided mixed signals for the CDFI Fund on at the end of the week of March 15th.
CU Strategic Planning and Callahan and Associates strongly objects to this directive to shut down the CDFI Fund following Congressional approval of continued full funding by Congress and the President to invest in the CDFI Fund and CU CDFIs.
Congress voted on a continuing resolution to fully fund the federal government and the CDFI Fund on Friday March 14, 2025, for FY 2025 which was signed by President Trump and announced Saturday morning March 15, 2025.
The White House also announced President Trump signed an Executive Order that directs the heads of 7 entities, including the CDFI Fund to submit a report within 7 days to the Office of Management and Budget to “reduce the performance of their statutory functions and associated personnel.”
This indicates that the CDFI Fund should wrap-up non statutory functions, however “non-statutory functions” is left undefined. The CDFI Fund was created by statute, the Riegle Community Development and Regulatory Improvement Act of 1994 which also established its programs. Whether this creation by statute qualifies as a “statutory function” is unknown, with the likely outcome of the agency largely dependent on a response from the agency’s director.
What can CDFI Credit Unions Can Do in Solidarity With CU Strategic Planning?
Immediately contact your member of the House of Representatives at their local district office and seek a meeting THIS WEEK to discuss Congressional votes to fully fund the CDFI versus the White House Executive order.
Be prepared to discuss your work as a CDFI, and how the funding has allowed you to help working families, home buyers and small businesses.
o Start with “I am very concerned with the President’s Executive order to wind down the CDFI Fund in spite of Congress voting for full funding in fiscal year 2025 this past week.”
Ask for an in-person meeting with your CU leadership this week.
Immediately call your member of the House of Representatives and both U.S. Senators to discuss this action that eliminates a key and well-functioning program that assists CU CDFIs capacity to help support low to moderate income members, and the entire credit union movement to meet the lending needs of families and small businesses.
Call and email the White House
202.456.1111 is the comment line. This administration only takes calls Tuesday through Thursday 11am – 3pm. The White House Switchboard is 202.456.1414 – they refer you to the limited comment line.
Email the President at comments@whitehouse.gov
Don’t expect an email acknowledgement – but fill that comment box!
Join us to stand up!
Update: March 10
House Continuing Resolution Includes Budget Allocation for CDFI Fund at 2024 Levels
On March 8, the House Appropriations Committee released its Continuing Resolution (CR) to fund the federal government through the remainder of Fiscal Year 2025. The proposed legislation maintains most programs at their FY 2024 funding levels, with some exceptions.
Importantly, the CDFI Fund remains untouched by any changes, securing an appropriation of $324 million for FY2025. This is the funding needed for the 2025 CDFI Program FA and TA awards that are due on March 21. This is very positive news for CDFIs.
We’ll be continuing to monitor all movement in the federal budget discussions, since as we've seen this is a year for surprises. The FY2026 appropriations negotiations remain an unknown at this point.
Update: March 6
Key Takeaways from CDFI Fund Director Pravina Raghavan at the GAC
At America’s Credit Union’s Governmental Affairs Conference, CDFI Fund Director Pravina Raghavan provided insights into the evolving CDFI certification and recertification process, emphasizing the need for strong narratives and supporting documentation. She also addressed pressing concerns, including the 60% lending threshold, the future of private-sector investment in CDFIs, and the Fund’s stance on clawbacks.
Raghavan encouraged credit union CDFIs to focus on the Low-Income Targeted Population, offered insights on advisory boards as a tool for accountability, and stressed that the Fund is not seeking to eliminate fees but wants to understand how CDFIs use them differently.
Update: February 21
CFPB's Credit Union Advisory Council to be Terminated
The president’s February 19 executive order entitled “Commencing the Reduction of the Federal Bureaucracy” covered the elimination and downsizing of multiple entities, programs, and advisory committees. Included in the list of advisory committees to be terminated are the Credit Union Advisory Council and Academic Research Council of the CFPB. There is no mention of other two CFPB advisory councils (the Consumer Advisory Board or the Community Bank Advisory Council) in the order, but it does call for the FDIC to terminate its Community Bank Advisory Council.
As stated in previous updates, it’s unclear if this will have direct impact on CDFI regulation or recertification. The CDFI Fund has not made any statement related to changes at the CFPB.
Update: February 12
CDFI 2024 FA Award Funds are Being Disbursed
Despite a federal judge on Monday finding that the Trump administration violated a court order lifting the broad freeze on federal spending and certain agencies continuing to withhold funds, CDFI 2024 FA award winners are beginning to see their first disbursements of award funds.
This follows the normal timeline of award distribution and is another positive sign that CDFI Fund operations are continuing as normal.
2024 FA award assistance agreements were signed and returned by recipients to the CDFI Fund by the first week in February. The Fund issues its first disbursements shortly after countersigning those agreements. CU Strategic Planning has seen final countersigned 2024 FA award agreements for three quarters of our clients at this point.
Jonathan Gould Nominated for Comptroller of the Currency, Jonathan McKernan to Lead CFPB
Less than a week after former NCUA chairman Rodney Hood was named Acting Comptroller of the Currency, the Trump administration has nominated Jonathan Gould to lead the financial regulator. Gould is former chief counsel for the Senate Banking Committee senior deputy comptroller and chief counsel of the OCC under Joseph Otting during the first Trump administration and has shown to be amenable to easing regulations for banks and cryptocurrency.
McKernan was one of two Republicans appointed to the mostly-Democratic FDIC board during the Biden administration. His nomination as head of the Consumer Finance Protection Bureau was announced the same day that President Trump reaffirmed his goal dismantle the CFPB.
The next step in the nomination process is for the Senate Banking Committee to hold a hearing on both nominations to lead the CFPB and OCC on a permanent basis.
While the OCC has no regulatory authority over credit unions, it was considered a positive sign when credit union veteran Hood was named as the acting head of the office. The CFPB has supervisory authority over credit unions above $10 billion in assets, and the OCC, CFPB, FDIC, and NCUA all participate in interagency guidance on consumer credit practices.
Update: February 10
CDFI Fund Grant Evaluator Contracts Under Review
The CDFI Coalition is reporting that the Department of the Treasury is evaluating several hundred contracts on the recommendation of the Department of Government Efficiency (DOGE) today, which include the cancellation of several hundred contracts. Among these are the evaluations of NMTC allocation applications, as well as CDFI and NACA applications.
The CDFI Fund uses outside, contracted grant scorers as part of its evaluation process for CDFI grant applications. If these contracts were to be canceled, it would create a personnel burden on the staff of the CDFI Fund, but would not necessarily prevent these applications from being scored.
The CDFI Coalition’s 2025 Advocacy Campaign includes congressional contact lists and sample emails for staffers in support of CDFI Fund appropriations.
Update: February 10
CFPB is Halting Operations
The new Director of the Office of Management and Budget Russel Vought directed the Consumer Financial Protection Bureau (CFPB) over the weekend to stop work on proposed rules, suspend the effective dates on any rules that were finalized but not yet effective, and stop investigative work and not begin any new investigations, and cease all supervision and examination activity. The offices of the CFPB headquarters in Washington, D.C. will also be closed this week. Consumer complaints may still be made on the CFPB website, although the home page of the site returns an error message.
The agency was created under the Obama administration to protect consumers following the 2008 financial crisis.
The impact this will have on CDFIs at this point is uncertain, but there is a possibility it may impact implementation of regulation of overdraft protection and other fees in the recertification process. The CDFI Fund has not yet made any statement about whether the changes to the CFPB will have any impact on its interpretation of the new CDFI certification guidelines.
Update: February 7
Rodney Hood, Champion of Credit Unions and CDFIs, Named Acting Comptroller of the Currency
Rodney Hood, former NCUA board member under two administrations and chairman of the NCUA during the Trump administration, has been named acting Comptroller of the Currency and is set to be sworn in on Monday. While Hood is not expected to be a candidate for the permanent position, history suggests that his tenure could be significant — Michael Hsu, who was initially appointed as an acting Comptroller under the Biden administration, served in the role for over three years.
A Champion for Credit Unions & CDFI Expansion
The Office of the Comptroller of the Currency supervises national banks and federal savings associations. The Comptroller also serves as a director of the FDIC and member of the Financial Stability Oversight Council and the Federal Financial Institutions Examination Council. Hood brings to the position a history with both credit unions and Community Development Financial Institutions (CDFIs).
As NCUA Chairman, Hood was a key advocate for credit unions seeking CDFI certification. In 2021, he launched the streamlined CDFI qualification process, a critical component of ACCESS, the agency’s financial inclusion initiative. His leadership made it easier for federally insured, low-income credit unions to secure CDFI certification, unlocking new funding opportunities and expanding their ability to serve underserved communities.
Hood’s lasting impact on financial empowerment efforts continues to benefit credit unions and the communities they serve.
What’s Next?
Though Hood’s appointment as acting Comptroller is technically temporary, his tenure could extend well beyond expectations. With no immediate successor named, Hood has the opportunity to influence key regulatory decisions and continue championing both credit unions and CDFIs within Treasury and at the OCC.
Update: February 3
District Court Issues Temporary Restraining Order to Block Federal Funding Pause
All US Treasury grantees and contractors received a notification this morning about the Temporary Restraining Order (TRO) issued by the U.S. District Court for Rhode Island in New York et al. v. Trump, blocking the federal government from pausing or delaying financial assistance programs.
The TRO was granted on Friday the 31st to make it abundantly clear that the initial Executive Order initiating the pause on federal funding is not effective against current or future grants and against all federal agencies, whether or not they were specifically named in the Executive Order.
What does that mean?
This means that federal agencies are to continue with all existing and future financial assistance programs that have been allocated. This will remain in place until a preliminary injunction hearing and further court ruling.
How the decision was made
In issuing the TRO, the Court considered the potential for harm on either side, and found, among other things that:
The Executive Branch lacks authority to unilaterally pause federal financial assistance without Congressional approval.
The funding pause likely violates the Administrative Procedure Act (APA) by overriding Congressional appropriations.
The action violates the Separation of Powers Doctrine by improperly asserting executive authority over funds appropriated by Congress.
Update: January 29
Let’s start with a brief recap:
The Trump administration initially issued a memo on Monday, January 27 to freeze or “pause” all federal grant programs with a deadline of 5pm Tuesday January 28. Just before the freeze was to go into effect a federal judge issued an order to delay implementation of the freeze, and finally on Wednesday, the administration reversed course, rescinding Monday’s memo and likely allowing federal grant programs to proceed.
Where do we stand now?
For FY 2024 Financial Assistance (FA) award winners, this means the CDFI Fund will continue moving forward with their normal processes. FA Assistance Agreements are being signed and disbursements should begin soon; Technical Assistance (TA) award Assistance Agreements have not yet been made available.
FY 2025 FA and TA applicants, the process continues as normal. Even before the pause was rescinded, the CDFI Fund has been operating in a matter that demonstrates confidence in the security of this next award round, with “business as usual” communications sent out this week. We are working on the end stages of our credit unions’ FY 2025 applications for a late March submission.
Current award recipients with funds still outstanding (FY 2022 FA/TA and ERP), there is no longer a need to rush any disbursement requests. We are, of course, always available to complete these requests for our clients at the time that’s best for the credit union.
What does this mean for the future?
The Trump administration has stated that the aborted pause order served its purpose to demonstrate federal agencies’ need to abide by the newly issued executive orders. It appears, however, that this is a recognition of the federal government’s need to meet its obligations in disbursing congressionally appropriated funding.
As to what will happen with future budgetary allocations, we’ll repeat what we’ve mentioned before – the CDFI Fund has been a part of the Treasury Department for 30 years. It has strong bipartisan support and was well-funded during the first Trump administration.
Further, newly seated Treasury Secretary Scott Bessent has already indicated his strong support for the CDFI Fund and the CDFI Fund’s programs during his confirmation, saying "I believe that the breadth of the US Financial Services industry is what… differentiates the US economy from the rest of the world and I think the addition of these CDFIs into underserved communities are very important."
In addition, our outside advocacy counsel on Capitol Hill has been meeting with key members of the House and Senate Appropriations and Banking Committees for intelligence on the fluid situation this week and has been receiving reassurance of support of the CDFI Fund and its programs.
Staying informed and moving forward
It’s safe to say that these are unprecedented times for agencies that rely on federal grants and loans for their services. We will continue to follow all legislative and regulatory news that relates to credit unions and CDFIs, in order to continue to help credit unions unlock opportunities that change the lives of their members and communities.
This week’s rapid unfolding of events demonstrates the need to transition our “All Things CDFI” column into an on-going report that can be updated whenever there’s news to share and helping keep you informed on issues impacting CDFI credit unions. We’d like to invite you all to subscribe below to receive email updates from us on these time-sensitive issues as they’re posted. And you’ll be hearing from us soon!
Update: January 27
Appropriations Process Underway: March 14 is Next Deadline for FY 2025 Budget
The “four corners” of Appropriations Senators Susan Collins (R-ME) and Patty Murray (D-WA) and House Members Kay Granger (R-TX) and Rosa DeLauro (D-CT) met last week on “top line” budget numbers for the 12 appropriations bills that need to be completed, passed by House and Senate and sent to President Trump for approval. Word is they have those top line numbers in mind and CU Strategic Planning will be working with all appropriators to keep CDFI Budget numbers as high as possible in the Financial Services General Governance (FSGG) budget which mostly makes up the budgets for the US Department of Treasury.
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