'Lifeline': GOP revolts as Trump orders 'maximum' cuts for popular lending program

19 March

Late Friday night, March 14, President Donald Trump issued an executive order telling federal agencies to cut the Community Development Financial Institutions Fund (CDFI Fund) "to the maximum extent." The CDFI Fund, established via the Riegle Community Development and Regulatory Improvement Act of 1994, provides loans to small businesses in poorer areas — urban and suburban as well as rural — that are underserved by banks.

According to Politico's Katherine Hapgood, Trump's order is drawing criticism — some of it from fellow Republicans.

On X, formerly Twitter, Rep. Young Kim (R-California) posted, "The CDFI Fund is a lifeline for underserved populations to access capital & directly supports multiple Orange County credit unions that serve our community. This partnership represents the best of public-private sector collaboration & deserves our continued bipartisan support."

Hapgood, in an article published by Politico on March 19, cites House Financial Services Chairman French Hill (R-Arkansas) and Senate Banking Committee Chairman Tim Scott (R-South Carolina) as two other examples of Republicans who have "historically been strong proponents of the targeted fund."

"Trump's proposal to cut the (CDFI) Fund crosses into an area lawmakers are loath to touch — assistance for the Main Street business community many GOP members turned to for support during the election," Hapgood explains. "The (Trump) Administration's latest action, which could more heavily impact red districts, may show the limits of Republican support for the Administration's cost-cutting crusade…. From the inception of the CDFI Fund in 1994 through February 2025, Arkansas-headquartered CDFIs have received $187.9 million from the fund and South Carolina- headquartered CDFIS have received $75.3 million, according to the CDFI Coalition, an industry advocacy group."

Brooke Nethercott, a spokesperson for Hill, says the House Financial Services chairman remains a CDFI Fund supporter.

Nethercott told Politico, "Chairman Hill knows the impact CDFIs can have on communities, particularly in rural areas. Our committee looks forward to learning more from the (Trump) Administration."

Read Politico's full article at this link.

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