Despite interest from the Trump White House in ending Treasury funding for CDFIs, the Congress passed a 2017 funding measure that not only continues funding CDFIs, but also boosted the available funds for the federal revolving loan fund used by these entities. The bill passed by Congress was sent to the President and signed into law on May 5, 2017. Although funding bills do not directly translate into policy positions, strong funding from a Republican-led Congress does suggest bipartisan support for CDFIs outside of the White House.
CDFIs play an important role in the financial services ecosystem. In addition to the consumers and small businesses that engage in lending with CDFIs, banks rely on the CRA credit they receive from regulators due to partnerships with CDFIs. CDFIs provide an important safety net in the overall banking system. Should CDFIs disappear, those organizations in line to take their market share do so without a directive to better the communities where the lending occurs. With little to no incentive to provide financing terms that recognize the importance of certain lending to the community, the borrower could face unfavorable terms and the overall community could feel the impact. The fact that CDFIs have succeeded and continue to grow proves their need to the financial services industry and their importance to the communities they serve.