New Executive Order Targets Community Development Financial Institutions

President Trump signed an Executive Order targeting the Community Development Financial Institutions (CDFI) Fund for elimination. Run by the U.S. Treasury Department, the CDFI Fund oversees several programs, including the New Markets Tax Credit and the Capital Magnet Fund.

The precise implications of the order are not yet clear, and the text of the order notes that the elimination would be to the maximum extent practical based on existing statutory requirements. Many CDFI Fund programs are incorporated into statute. It is possible that responsibility for some programs could shift as a result of the order. An initial step outlined will be a report to the White House from Treasury officials.

CDFIs around the country range from banks and credit unions to loan funds and venture capital providers. These institutions support affordable housing projects and economic development finance, particularly in distressed neighborhoods and communities of persistent poverty.

The move comes on the heels of recent action at the U.S. Department of Housing and Urban Development (HUD) to cut some targeted Section 4 capacity-building grants for affordable housing. HUD Secretary Scott Turner also announced action to rescind the Affirmatively Further Fair Housing rule, issue new guidance to ensure alignment of programs with White House Executive Orders, and reduce agency staffing.