Senate Moves to Restore Trump-Targeted Community Lending Fund

Senate appropriators are proposing to replenish a Treasury Department agency supporting community financial institutions that the Trump administration targeted for deep cuts.

The Senate included $324 million for the Community Development Financial Institutions Fund in a fiscal 2026 appropriations bill for the Treasury Department and other agencies released Monday.

The proposal comes after Democratic and Republican lawmakers decried the Trump administration’s moves to slash federal awards supporting the CDFI Fund and to terminate all of the agency’s staff during the government shutdown.

The Senate appropriation is around $47 million more than the House proposed allocating to the CDFI Fund in a Treasury funding bill (H.R. 5166) the House Appropriations Committee approved along party lines in September. The Treasury spending measure is among several that lawmakers are seeking to advance ahead of a Jan. 30 deadline to fund covered agencies.

“This latest step shows lawmakers recognize just how much these investments matter on the ground,” Scott Simpson, the president and CEO of America’s Credit Unions, said in a statement.

Many small credit unions and banks qualify as CDFIs, which focus on affordable housing development, small businesses, and other community needs in areas that don’t have easy access to traditional financial institutions.

Created in 1994, the CDFI Fund provides money and technical assistance to qualifying financial institutions. Small, independent loan funds can also qualify for CDFI Fund grants and other programs.

The Trump administration proposed cutting funding for the CDFI Fund by nearly $300 million in a “skinny budget” released in May. The administration also proposed creating a $100 program specifically for rural communities, though the Senate legislation doesn’t include it.

The administration also planned to subject all of the CDFI Fund’s staff to a reduction-in-force order during the 43-day government shutdown, but the job cuts were stopped in the deal this month ending the shutdown.

Even with the potential for restored funding, some CDFI Fund backers are still concerned about how the Trump administration will put the money eventually allocated to work.

“The real test is whether the money actually gets out the door and reaches urban, rural, and Native communities in 2026,” Jesse Van Tol, the president and CEO of the National Community Reinvestment Coalition, said in a statement to Bloomberg Law. “We have seen a lot of delay in 2025, and that means fewer loans are made to small businesses, affordable housing and community infrastructure.”