WASHINGTON — Despite an effort by the Trump administration to defund government aid for community development financial institutions, the Senate on Thursday voted 79-18 to approve a budget deal that included $258 million in funding for the CDFI fund.
The package passed the House on Wednesday and will now head to President Trump's desk, where he is expected to sign the deal.
Banking and credit union groups praised passage of the measure, arguing the CDFI fund is critical for helping lending to low- and moderate-income consumers. The package also included an extra $2 million for the Community Development Revolving Loan Fund.
"NAFCU strongly supports the Community Development Financial Institutions Fund and Community Development Revolving Loan Fund, both of which deliver much-needed resources for low-income-designated and CDFI-certified credit unions seeking to strengthen their operations and service to members," Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, said in a press release. "We thank the leaders of the House and Senate for their action on this measure and look forward to its enactment."
CDFI-certified credit unions represent 27% of the total number of such institutions and hold more than 50% of CDFI assets, NAFCU said.
The Trump budget had sought to eliminate funding for the CDFI fund entirely, with officials portraying it as wasteful government spending. The move was a surprise because the fund has generally received bipartisan support and constitutes an extremely small percentage of the overall budget. CDFI funds also generally help borrowers in rural areas, which voted overwhelmingly for President Trump.