A View From DC on the Incoming Congress: Put CDFIs to Work

Midterm Shock Waves Continue to Reverberate

Mike Beall, Chief Experience Officer, CU Strategic Planning

Races remain to be called, but a Democratic led Senate with a likely 56-44 majority (as we still wait on Mississippi and Alaska to finish counting) and a huge House Democratic caucus of likely 260 members (14 races remain to be called as this is written) will set a new power dynamic for January 2027. In the meantime, a lame-duck Congress works through the priorities that can be accomplished over the next 6 weeks.

This leadership flip ensures that CDFI-friendly policies, capital access expansions, and minority depository protections will move from defensive positions to the forefront of the legislative docket. However, Russell Vought’s Office of Management and Budget sought sweeping overhauls of the Uniform Guidance (2 CFR 200) federal grant rules, which were meant to take effect in October 2026 but were overridden by language in the budgetary continuing resolution passed by Congress to keep the government funded. From a CDFI perspective, keeping those grant rules from being implemented should be a priority for both parties. 

The Senate Community Development Caucus should have newly reelected Senator Mark Warner (D-VA) as lead co-chair. We think the House needs a partner caucus, and this new Congress is the time to help get one started. (Ohio Representatives Rep. Marcy Kaptur D-OH) and Dave Joyce (R), plus Rep. Glen Ivey (D-MD) and Rep. Mark Alford (R-MO) come to mind as strong advocates who have recognized the value of the CDFI program in past years.   

• Make the CDFI Fund Fully Functional: CDFIs deserve to understand why the CDFI Fund is delayed in completing the painfully slow CDFI recertification program, and to launch the delayed Financial Assistance and Technical Assistance awards for 2026 NOFA’s to move congressionally approved funding into rural and urban communities that need it. We applaud the CDFI Fund’s initial progress under Director Chris Miller, but we need more and faster from the administration.
• Help Families Afford the High Cost of Living:  Congressional appropriators should consider targeted funding designed to help low-income consumers hit hard by escalating inflation and housing costs. We recommend a similar Rapid Response Program to assist CDFIs in helping their communities. Congress should consider a $3 billion funding level in the FY 2027 budget to help consumers struggling with household affordability issues related to housing and high cost of living. Congress should also consider funding the NCUA Community Development Revolving Loan Fund at $10 million for FY 2027. 
• Make CDFI Certification Make Sense: For highly regulated CDFI credit unions and banks, make certification sensible and allow credit unions two pathways to certification with either 60% of loans funded OR 60% of the dollars of loans lent to their target markets rather than requiring both. This change does not even require regulatory change. Requiring both is overburdensome and sets an unnecessarily high bar for regulated financial institutions. 

We think these commonsense ideas re-energize CDFIs’ abilities to help working families with the affordability crisis in lending costs, homeownership, home and auto insurance costs, and other main street problems faced by working families in this current economy. Put CDFIs to work.

Before the election, Congress passed a continuing resolution (CR) that kept the 2027 budget levels for the CDFI Fund (around $324 million) and set up Dec. 11 as the next date when Congress would have another deadline to either pass a full-year 2027 Federal Budget, or at least another CR to keep the federal government funded and operating—perhaps into the new year of 2027.

The interesting part is whether the outgoing slim Republican majority can get a full-year budget passed or whether Congress settles for another CR that pushes the 2027 budget into the hands of the strong incoming Democratic majorities to build their own 2027 budget. Either way, the chances of a government shutdown appear to be slim.  

At Senate Appropriations, Republican stalwart Susan Collins (R-ME) lost on election night, and the gavel will pass to longtime Senator Patty Murray (D-WA), who will now be working with maverick Republican Senator Lisa Murkowski (R-AK). Murkowski is likely to take a strong position opposing OMB’s push to move ahead with the grant regulation and should be CDFI Fund-friendly as well.

On the House side, Democrat Rosa DeLauro (CT) will likely return to the chair she held from 2021-2023

Credit unions can look forward to working with consumer advocate Senator Elizabeth Warren (D-MA) as the new chair of the Senate Banking Committee. CNBC and Politico report that Warren will be focusing on the Wild West of corporate operations and a tighter review of crypto and prediction markets. 

Affordability for working families will likely be at the forefront of her vision, including renewed talk of capping credit card interest rates, and could signal a return to topics central to her legacy: the Consumer Financial Protection Bureau. Look for Chair Warren to make protecting (and even expanding) the role of CFPB a priority for her Committee in 2027 and beyond.  

On CDFIs: Warren has been a champion of CDFIs and may be a leader in getting the administration to further work to see that the “trains run on time” at the CDFI Fund.  House veteran and staunch CDFI supporter Rep. Maxine Waters (D-CA) looks to return to her role as Chair of House Financial Services.

John Crews is the Chairman and the only Senate-approved NCUA Board Member designated by President Trump. He was named Chairman of the NCUA Board of Directors and sworn in on Aug. 24, 2026. His term expires Aug. 2, 2031. Following the 2025 removal of previous members Todd Harper and Tanya Otsuka, additional board positions are subject to ongoing presidential appointments and Senate confirmations.

Crews was formerly a direct report to Treasury Secretary Scott Bessent, making the “independence” of the agency in question, especially without any other board members. As the new Congress is seated, it appears that a Democratic Senate would have the power to reject future Trump NCUA appointees, assuming the administration brings any forward.

The status quo of NCUA leadership seems likely to remain with Crews, with potential direction from Treasury, through early 2029. A Democratic president, if elected in 2028, might similarly be expected to remove Crews and appoint a new democratic Chair and/or board.

We look forward to bringing you up to date as the lame duck session proceeds and the table is set for the next Congress starting in 2027.