Credit unions in the US have welcomed the news that lawmakers are planning to appropriate $324m for the federal Community Development Financial Institution (CDFI) Fund for the coming financial year.
This is a welcome reversal for the sector after the fund, which supports credit unions serving low-income and underserved areas through grants, certifications, and access to capital, was axed during last year’s federal shutdown, sparking an outcry from the credit union movement.
On 10 October, Donald Trump’s administration fired all 81 staff at the fund, but this decision was reversed the following month when the federal shutdown came to an end.
This move saw Trump sign new legislation requiring the Treasury to notify terminated CDFI Fund employees that they have been reinstated with full backpay.
In the latest development, House legislation has been released to appropriate the $324m for the fund.
Sector body America’s Credit Unions has consistently lobbied for this sum to be allocated, matching the amount given in the 2025 financial year. It has been working with Congress to see the funding restored, including in a recent letter to the House Appropriations Committee.
The fund had originally been eliminated in the White House’s FY26 budget proposal, but in September the House Appropriations Committee partially reversed this, voting to provide $276.6m.
The committee also voted to reverse the axeing of the Community Development Revolving Loan Fund (CDRLF), allocating $3.4m. This is provided by the National Credit Union Administration (NCUA) to offer technical assistance grants for credit unions.
Now, the CDFI fund has been restored in full. The fund awards grants to assist affordable housing, homeownership, small business growth, and more through certified CDFIs.
Credit unions make up the largest group of certified CDFIs – 444 of 1,375.
