Policy and Legislative Updates for Credit Unions
Update: January 29, 2025
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 Even before the pause was rescinded, the CDFI Fund has been operating in a matter that demonstrates confidence in the security of this next award round, with “business as usual” communications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, 2025
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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