A Critical Step Forward for the CDFI Fund

Posted by Erin Hall on April 13, 2026

After months of uncertainty and sustained advocacy, there is finally encouraging news for the Community Development Financial Institutions (CDFI) Fund. The Office of Management and Budget (OMB) has released congressionally appropriated Fiscal Year (FY) 2025 CDFI funding to the U.S. Department of the Treasury — a major step forward that reflects the strength and persistence of bipartisan support for the CDFI mission.

While the official notice of funds availability and awards dispersal is still forthcoming, confirmation that the funds have been released marks a significant milestone. The $289 million appropriated for FY25 — funding that operates on a two-year cycle and is set to expire on September 30 — will now be able to move forward after months of pressure from lawmakers and stakeholders who recognize the vital role CDFIs play in underserved communities.

Important Caveats and Emerging Concerns

At the same time, this moment of progress is paired with new uncertainty. Treasury has announced that it will issue additional rules governing CDFI Fund awards to ensure compliance with federal law. These include provisions intended to prevent taxpayer-funded benefits from being diverted and to reinforce compliance with federal non-discrimination requirements in CDFI operations.

While accountability and compliance are essential, it will be critical for Treasury to implement these rules in a way that does not undermine the ability of CDFIs — including credit unions — to effectively serve their communities. Stakeholder engagement will be vital as these rules are developed and implemented.

Equally concerning is the broader budget landscape. The White House’s FY27 budget proposal would eliminate all funding for the CDFI Fund, underscoring just how fragile these gains remain.

The Work Continues: Senate Outreach Is Still Essential

Even as FY25 funding begins to move, several major funding streams remain stalled, including:

• FY26 CDFI funding
• Capital Magnet Fund (CMF) funding
• Emergency Capital Investment Program (ECIP) proceeds

Because of these ongoing delays, advocacy efforts cannot slow down. Congressional and Regulatory outreach over the coming days remains critical, especially around:

• FY27 appropriations
• Clear statutory language requiring apportionment
• Award and program timeline requirements

Ensuring that appropriated funds are not only approved but also actually released in a timely and predictable manner is essential for CDFIs to plan, lend, and serve effectively.

Thank you to everyone who has taken action — through calls, meetings, letters, and sustained engagement — to defend the CDFI Fund. At the same time, it is not the finish line. Continued vigilance and proactive engagement with policymakers will determine whether CDFIs can count on stable, reliable funding in the years ahead.

If you have questions or need support, please don’t hesitate to contact Erin Hall.

Posted in Advocacy on the Move, Regulatory Advocacy.