Two senior Republican senators said Tuesday they strongly support the Treasury Department’s Community Development Financial Institutions Fund after the Trump administration moved to eviscerate the program by firing all of its staff.
The elimination of employees at the CDFI Fund on Friday was part of the larger reduction-in-force orchestrated by Office of Management and Budget Director Russell Vought. A letter to fired employees said their termination was necessary to implement the abolishment of the entire CDFI program, which enjoys strong bipartisan support.
Senate Community Development Finance Caucus co-chair Mike Crapo (R-Idaho) told POLITICO Tuesday that he “was discouraged to see the actions taken to [RIF] the employees, and I’m hopeful that we can get that turned around.”
Sen. Mike Rounds (R-S.D.), who’s consistently been vocal in his support of the fund, said he remains “fully supportive” of the CDFI Fund and that “the CDFIs do an excellent job in particular areas” and he’s “seen it firsthand in South Dakota.”
The fund awards federal dollars through a public-private partnership to CDFIs, which are community banks, credit unions and other financial institutions that lend and provide other types of capital to communities and markets traditionally underserved by the larger banking industry. The CDFI Fund was designed to increase the accessibility of financial services and products.
Rounds said the quickest way to fix the situation at the fund is to “get a continuing resolution in place and move forward” and re-open the government.
South Dakota CDFIs received $13.3 million from the fund in 2024, making the state a top recipient per capita.
Crapo would not comment whether he had spoken with Treasury Secretary Scott Bessent or the White House on the matter but said that “Congress has a role anytime Congress chooses, it can take some action.” He added that he and his caucus co-chair, Sen. Mark Warner (D-Va.), “are going to work together to try to get this fixed.”
Warner, on a press call Tuesday, said he’s working with Crapo to try to send a bipartisan letter from the caucus like they did in March after the initial executive order requesting the fund be eliminated to the fullest extent allowed under the law, to “show strong, bipartisan pushback.”
Additionally, Warner said he sent Bessent a letter regarding the unexpected firings on the CDFI Fund’s entire staff and that he expected to hear a response back soon. Neither he nor Crapo saw the RIFs coming, Warner said.
“At least my office and Crapo’s office, the first reaction [to the CDFI Fund RIFs] was shock” and that “it appears maybe this didn’t come from Treasury, it appears that it came from the OMB. I think this goes against the law,” Warner said.
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