Senate Appropriations Committee Recommends Increased Budget for CDFI Fund

In a significant move for community development finance, the Senate Appropriations Committee has voted to allocate $354 million to the Community Development Financial Institutions (CDFI) Fund for the fiscal year 2025. This decision marks a $30 million increase from the previous year, reflecting a growing recognition of the vital role CDFIs play in promoting economic opportunity and financial inclusion across the United States.

Key Details of the Funding Proposal

On August 1, 2024, the Senate Appropriations Committee approved its proposed Financial Services and General Government spending bill, which includes the aforementioned budget for the CDFI Fund. This funding not only represents a notable increase but also surpasses the House of Representatives’ proposed funding of $276.6 million and the Biden Administration’s request for $325 million. The new allocation is nearly $80 million higher than the House’s proposal, indicating a robust bipartisan commitment to strengthening CDFIs.

Among the notable components of this budget are a $10 million subsidy for the Bond Guarantee Program and a $7 million increase for the Native CDFI Assistance Program (NACA). These targeted investments are designed to enhance the capacity of CDFIs to serve underserved communities more effectively.

Bipartisan Support for CDFIs

The Senate’s funding decision underscores the strong bipartisan support for CDFIs, with both Democratic and Republican leaders acknowledging their pivotal role in fostering economic growth. Senator Chris Van Hollen, the Chair of the Senate Appropriations Financial Services and General Government Subcommittee, emphasized that creating an inclusive economy should be at the forefront of legislative efforts. Furthermore, Senator Bill Hagerty highlighted the bill as a constructive step towards ensuring essential investments in local economies.

As Dafina Williams, OFN’s Executive Vice President, noted, CDFIs empower hardworking Americans to launch and expand their small businesses, secure affordable housing, and invest in their communities. This funding is a critical acknowledgment of the enduring contributions of CDFIs in advancing economic justice.

The Road Ahead

As Congress enters its August recess, the urgency of finalizing the budget grows. With federal financing set to expire at the end of September, lawmakers may need to enact a continuing resolution to avert a government shutdown. The appropriations process could face delays, potentially pushing negotiations into November due to the upcoming elections.

For advocates of the CDFI Fund, this moment is pivotal. The Opportunity Finance Network (OFN) has urged supporters to engage with their Congressional representatives to endorse the Senate’s proposed funding level, emphasizing the importance of sustaining support for CDFIs.

By advocating for increased investment in the CDFI Fund, stakeholders can help ensure that these institutions continue to serve as catalysts for community development and economic empowerment. The path forward is not only crucial for communities in need but also for the broader economy, which thrives on the diversity and resilience fostered by CDFIs.

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