By Lydia Wedlock, editorial assistant, The Credit Union Connection
Last Friday, a Continuing Resolution was passed to prevent the government from shutting down and, among many other things, keep the Community Development Financial Institutions Fund (CDFI Fund) funded. Soon after its passing, President Donald Trump signed an executive order that could strip the CDFI Fund down to what is statutorily necessary. Although CDFIs, including a growing number of credit unions, continuing to receive funding is good news, the signing of this new executive order now means that there will be questions regarding which grant programs will continue.
In essence, the new executive order limits the CDFI Fund to its statutory functions and limits those same functions to the minimum provided by law. For those credit unions with CDFI grants, those grants must be subject to those appropriations and consistent with the listed functions.
What Does the Executive Order Do?
CU Strategic Planning, a veteran consulting firm in the credit union CDFI space, commented, “CU Strategic Planning and Callahan & Associates strongly object to any directive that would curtail the statutory mission of the CDFI Fund. President Trump’s executive order comes right after congressional approval of the continuing resolution, which included full funding for the CDFI Fund FY 2025. The executive order could prevent CDFIs and millions of consumers and small businesses from receiving increased access to affordable loans.”
According to America’s Credit Unions Chief Advocacy Officer Carrie Hunt, the real question is how many of the current grant programs will be permitted under these new statutes. Currently, America’s Credit Unions is collecting questions from concerned credit unions and will send a letter to the Treasury Department on Sunday requesting clarification regarding certain aspects of the order.
What Will Be the Impact?
Regarding the passage of the Continuing Resolution, many were happy to see the support for the CDFI Fund and its continued work of helping underserved communities.
“Passage of the CR and its signing by the President ensures thousands of government employees and their families were relieved of a potential financially stressful situation,” said Jason Stverak, DCUC Chief Advocacy Officer. “Thankfully during these stressful times, credit unions were once again ready to support their members if Congress was unable to finally reach an agreement.”
However, with the passage of President Trump’s executive order, there’s now a great deal of concern that the CDFI Fund will ultimately lose the ability to support credit unions with CDFI grants and, in turn, limit investment from the approximately 500 CDFI credit unions in their communities.
As America’s Credit Unions President/CEO Jim Nussle stated in reaction to the executive order, “Credit unions exist in the financial services marketplace to provide provident credit to millions of Americans, and they do it in a way that creates financial well-being, so people are empowered to stand on their own two feet. The CDFI Fund has allowed hundreds of credit unions to bolster economic opportunity in their communities and allow their members to achieve the American Dream—further enhancing our nation’s strength. America’s Credit Unions will continue to engage the Trump Administration, Treasury Department, and other stakeholders on programs that support these shared goals.”
Defense Credit Union Council (DCUC) Chief Advocacy Officer Jason Stverak said, “The Passage of the CR and its signing by the President ensured thousands of government employees and their families were relieved of a potential financially stressful situation. Thankfully, during these stressful times, credit unions were once again ready to support their members if Congress was unable to finally reach an agreement.”
In a letter to U.S. Treasury Secretary Scott Bessent, DCUC also expressed concern over how the executive order will affect military servicemembers and their families. “The CDFI Fund is a crucial resource that empowers mission-driven credit unions to provide affordable financial services in economically distressed communities,” Stverak wrote. “As of January 2025, 495 certified CDFI credit unions across the nation serve millions of residents in low-income areas, including those surrounding military bases. Many junior enlisted servicemembers qualify under the CDFI Fund’s “Low-Income Targeted Population” criteria, relying on CDFI-supported credit unions for accessible loans, financial education, and community development services.”
The work of the CDFI Fund has allowed credit unions to better support and provide financial services to underserved communities and individuals. With this executive order potentially shutting down the CDFI Fund, this could mean that many Americans face no longer having access to services that help them grow wealth and improve their communities, and during a time when many consumers are still dealing with inflation and facing further pressure from tariffs, this will hurt Americans’ wallets in the long run.