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CDFI Fund Staff Fired; Banks and Bipartisan Lawmakers Object

October 21, 2025

On October 10, the Trump administration fired all employees at the Treasury Department’s Community Development Financial Institutions (CDFI) Fund.

• The CDFI Fund, a private-public partnership with bipartisan support, allocates federal funding to community banks, credit unions and other financial institutions that lend to underserved communities. 

Catch me up: The CDFI Fund has been in the administration’s crosshairs for months. As reported by Politico, Office of Management and Budget (OMB) Director Russell Vought has withheld the Fund's congressionally appropriated money for months, “raising the ire of lawmakers on both sides of the aisle.”

• A bipartisan group of senators sent a letter to Vought on July 29 urging him to “swiftly obligate all discretionary funding provided by Congress to the CDFI Fund in a timely manner.”

OMB and Treasury do not appear to be completely aligned. After the issuance of President Trump’s March 14 Executive Order requiring CDFI Fund operations to be reduced to its minimum statutory authority, Treasury Secretary Scott Bessent stated, according to the ABA Banking Journal,

Confusion reigns: Politico reports that “both Republican and Democrat hill staff have been shocked by the RIFs [reduction-in-force] at the CDFI Fund.”

• OMB and Treasury had agreed a few weeks ago to release CDFI funds if they did not fund initiatives related to diversity, equity and inclusion or climate change.
• However, following the layoffs, no staff remain to process any of the 11 programs, including the New Markets Tax Credit program, which was permanently reauthorized under the One Big Beautiful Bill.
• In the meantime, a federal judge on October 15 blocked the Trump administration from laying off federal workers during the government shutdown.

What’s next: Senate Finance Committee Chairman Mike Crapo is circulating a draft bipartisan letter pressing President Trump to rescind the CDFI Fund RIFs. The draft underscores the importance of CDFI funds for affordable housing:

Additionally, a group of bank trades submitted a letter yesterday to Bessent and Vought urging them to maintain the CDFI Fund, describing it as “one of the federal government’s most effective, market-based strategies for fostering economic opportunity and expanding homeownership in low- and moderate-income communities."

The letter also states:

Given the important role that CDFIs play in the affordable housing space, CREFC will continue to monitor these developments. 

Please contact Sairah Burki (sburki@crefc.org) with questions.

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