Guardians of Pedophiles': Killing Community Development

Republicans push back on Trump cut to main street lending office

House and Senate Republicans are circulating a letter in support of the Community Development Financial Institutions Fund, which had all of its staff eliminated by the Trump administration.

Katherine Hapgood

Senior Congressional Republicans are pressing the Trump administration to reverse its decision to fire all employees at the widely supported, bipartisan Community Development Financial Institutions Fund, according to a draft letter obtained by POLITICO.

The bicameral GOP draft letter, led by Rep. Young Kim (R-Calif.), a member of the House Financial Services Committee, and Sen. Mike Crapo (R-Idaho), who chairs the Senate’s Community Development Finance Caucus, “strongly urge[s] the Administration to continue carrying out the statutory obligations of the CDFI Fund that are essential to ensuring private investments reach our states and districts.”

The draft letter, dated Oct. 23 and addressed to Treasury Secretary Scott Bessent and Office of Management and Budget Director Russell Vought, has been circulated by Crapo and Kim’s staff to Senate and House Republicans, said a source with direct knowledge granted anonymity to discuss private conversations.

Both Kim and Crapo’s offices declined to comment.

The Trump administration terminated all of the Treasury Department’s CDFI Fund employees, about 100 people, from their positions last week as part of a mass firing of government employees. The Trump administration said in a letter to the fired employees that the reduction-in-force was necessary to implement the abolishment of the entire CDFI Fund program. The firings are currently subject to ongoing litigation.

“While we understand difficult decisions must be made amid the ongoing Democratic government shutdown and our nation’s unsustainable fiscal trajectory, eliminating all work done by the CDFI Fund will negatively impact our economy long-term,” the draft letter said. “We stand ready to work with the Administration to make additional improvements at the Fund to ensure it fulfills its purpose of serving communities left behind by the federal government and the traditional finance sector.”

The fund awards federal dollars to CDFIs, which are community banks, credit unions and other financial institutions that lend and provide other types of capital as part of a public-private partnership designed to increase the accessibility of communities traditionally underserved by the banking industry.

The Republicans in the draft letter argue that CDFIs and developers who rely on the fund “are essential to expanding our nation’s housing supply,” are “key drivers of development and preservation of affordable housing” and additionally work to “scale housing investments to build new housing and bring down housing costs” through another CDFI fund program, the Capital Magnet Fund.

The draft letter mentions that the megabill signed into law in July makes permanent a key CDFI Fund program, the New Market Tax Credit, and that the National Defense Authorization Act, passed by the Senate last week, includes language to “improve transparency at the Fund and establish a secondary market to enable CDFIs to get more capital to small businesses.”