The CDFI Briefing
- Mike Beall, CUDE, Chief Experience Officer
- 2 days ago
- 13 min read
Policy and Legislative Updates for Credit Unions in 2026
April 17, 2026
Latest Update:
House Appropriations Subcommittee Passes Bill Funding CDFI Fund at $276M for FY 2027
The House Financial Services appropriations subcommittee voted today to advance its appropriations bill, including funding for the CDFI Fund at $276 million, the same level at which the House began the FY 2026 process.
That opening House number is not unusual. In recent years, the House has often started with a lower allocation than the Senate, with the final enacted appropriation ultimately landing higher after negotiations. In FY 2026, the final appropriation for the CDFI Fund was $324 million.
Today’s vote moves the bill to consideration by the full Appropriations Committee, which could take action on the legislation in the next few weeks. The bill will be assigned a number later today.
The subcommittee also did not adopt the Administration’s recommendation to reduce funding for the CDFI Fund.
Yesterday, OMB Director Russell Vought was hammered by Senators of both parties on his efforts to illegally hold up funding of many agencies on FY 2025 funds. Senator Mark Warner of Virginia, co-chair of the Community Development Caucus, specifically pressed Vought on CDFI Fund dollars that were finally released last week.
All of this action has meant CDFI Fund is returning to fully funded and more fully functioning as Congress asserts more control over the CDFI Fund appropriations.
April 15, 2026:
Senators Urge $324 Million for CDFI Fund in FY 2027
Sens. Mike Crapo (R-Idaho), Mark Warner (D-Virginia), and Steve Daines (R-Montana) are leading a bipartisan Senate push for strong FY 2027 support for the CDFI Fund, urging appropriators to provide no less than $324 million and to require the Fund to establish a clear schedule for publishing applications and making awards. In their April 15 letter, the senators argue that the CDFI Fund remains one of the federal government’s most effective community development tools, citing its ability to leverage private investment and support business growth, affordable housing, and essential community facilities in underserved areas. The letter included signatures from 43 senators in total. Of those, 35 are Democrats, 6 are Republicans, and 2 are independents that caucus with the Democrats.
The letter also mentions a familiar concern: FY 2025 awards still have not been announced. However, there is at least movement in that area. An OpenOMB posting shows an OMB-approved April 8, 2026 apportionment file for the Treasury’s Community Development Financial Institution Fund Program Account, which suggests the funding has at least cleared an important administrative step before the Fund announces the remaining FY2025 awards.
April 10, 2026:
Treasury Press Release Announces New CDFI Regulation Regarding Who May Benefit from CDFI Awards
A Treasury press release issued April 9 offers more context on the long-awaited movement of FY 2025 CDFI Fund dollars. The Office of Management and Budget (OMB) is in the process of releasing $289 million in FY 2025 funding for CDFI Fund grant programs.
Treasury’s announcement indicates that, alongside the release of those funds, it plans to issue rules concerning the treatment of certain CDFI Fund awards under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, or PRWORA. Treasury said the goal is to clarify that certain benefits funded through these awards are federal public benefits and therefore may not be provided to people who are not qualified under federal law, such as those without legal immigration status. The release quotes Secretary of the Treasury Scott Bessent as saying, “Under President Trump’s leadership, we are enforcing the law and preventing the abuse and misuse of CDFI Fund grants intended solely for American citizens and lawful residents.”
Credit union CDFIs working with CU Strategic Planning were not surprised by Treasury’s notice of rulemaking. We worked with our FY 2025 applicants to develop strategies that anticipated these administration initiatives, and once applicants that advanced in the process were given an opportunity to update their applications last fall (that deadline was later extended to April 10, 2026), we again reviewed and made adjustments to ensure that all applications matched the changing priorities and guidelines from the Fund. Three quarters of the grant applications we wrote for our clients advanced to this final round.
Credit unions, as highly regulated financial institutions and employers, have always abided by fair labor laws and regulations, so the new regulation from Treasury requiring certified CDFIs to comply with federal anti-discrimination laws and maintain policies and procedures add no new federal requirements. CU Strategic Planning expects these requirements will be included in CDFI certification/recertification agreements as well as grant award agreements.
In September 2025 the CDFI Fund committed to significantly restricting Other Targeted population as a qualified Target Market, as first showed in the amendment to the 2025 FA award. The OTP Target market has focused on race and ethnicity. The OTP Target Market is an agency interpretation and not statutory or regulatory, so these changes can occur without an official comment period.
The release reflected the two step dance between OMB and Treasury behind the delay in the release of the FY 2025 funds. The administration sought to ensure Treasury had regulations in place to enact its priorities that federal dollars not benefit immigrant communities without legal documentation to release those funds. CU Strategic Planning calls on the CDFI Fund to award FY 2025 applicants expeditiously and for them to proceed with the release of the NOFA to begin the delayed FY 2026 award cycle. Congress has already begun its process for FY 2027 CDFI funding and is expected to fully fund the CDFI Fund in spite of the administration’s 2027 budget request.
“Given the anticipated changes, it remains important for the CDFI credit union community to seek guidance as they navigate the evolving requirements and processes related to CDFI certification and funding opportunities. CU Strategic Planning’s experience and track record provide the best opportunity to obtain and retain CDFI certification and to win award dollars under the fully funded CDFI Fund programs,” concluded CU Strategic Planning President Stacy Augustine.
April 9, 2026:
Long Awaited FY 2025 Funds Expected for CDFIs Soon
CU Strategic Planning has confirmed that the government’s Office of Management and Budget (OMB) is in the process of releasing $289m of FY 2025 monies for CDFI Fund grant programs. The details are not completely clear as to exact timing of the release and how quickly this release will lead to the awarding of grant dollars to FY 2025 FA/TA applicants.
CDFI funds are appropriated for a two year period, which is fortunate since many other Congressionally approved funds expired last September at the end of the government's fiscal year. This gives the CDFI Fund until the end of September 2026 to distribute the FY25 appropriated funds.
We will update further as more information becomes available.
April 3, 2026
Notices of Award Noncompliance Sent to Recently Terminated CDFIs
The CDFI Fund has begun issuing notices of noncompliance to CDFIs that are still in the performance or reporting periods for CDFI Awards but lost certification after failing to submit recertification applications last year.
Institutions can cure the noncompliance by submitting a new certification application by May 1 or requesting additional time by April 10. Doing so places them in a cure period, suspending the noncompliance until at least August 1.
What This Means
Most affected institutions likely skipped recertification because they could not meet the updated standards. The cure period provides a narrow window to reapply using 2025 lending data instead of 2024 figures. For some, that shift alone may be enough to regain compliance.
Others will have a more difficult path—particularly those that remain below the required threshold of 60% of loans by number and 60% of loans by dollar volume to their Target Market, or that are not prepared to reapply quickly.
The notices do not clarify how much additional time may be granted. There is no indication that extensions would be long enough to incorporate 2026 lending data.
Risk of Sanctions
The notices cite standard assistance agreement language allowing the CDFI Fund to require repayment of award funds. In practice, that outcome appears unlikely. Based on our experience across hundreds of awards, we have seen occasional noncompliance notices but no instances of credit unions that we work with being required to return funds.
Historically, the CDFI Fund’s focus has been on ensuring funds are deployed to consumers and communities in need—not clawed back. Given how many institutions are struggling under the revised certification requirements, some flexibility is likely.
We are working directly with a number of credit unions that received notices and are advocating on their behalf. While repayment risk appears low based on past precedent, noncompliance should still be treated as a serious issue.
April 3, 2026:
Trump Releases 2027 Budget Request, Includes Proposed Cuts to CDFI Fund
President Trump has presented his 2027 budget request for the next fiscal year beginning in October, and, just as in past years of this and his previous administration, it includes significant cuts to the CDFI Fund. This year’s request also contains similar language to 2026’s request in its description of the CDFI Fund, claiming that Fund awards were “abused to advance a partisan agenda under prior administrations.” Despite that claim, the final passed FY2026 budget remained at the $324 million level seen for the last several years, a result of unwavering support in Congress.
The President’s budget request was prepared by White House Office of Management and Budget chief Russ Vought and shows huge increases to 2027 defense spending accompanied by huge cuts to domestic programs in the budget request. Also similar to last year is the "Cuts to Woke Programs” document accompanying the budget request. The section covering the CDFI Fund appears virtually identical to what was in last year’s version.
While this couldn’t be called good news, it’s not a surprise nor even a cause for concern. The President has attempted to zero out the CDFI Fund’s budget in every budget of both of his terms to this point. Both houses of Congress, on both sides of the aisle, have responded every year by continuing to fund what they and their constituents know is a valuable program that advances opportunity in communities across this country.
We at CU Strategic Planning have already started discussions with Congressional appropriators and the Senate Community Development Caucus, and will be fighting our way back to normal FY 2027 spending levels for CDFI in the months to come.
March 19, 2026:
CDFI Groups Urge Release of More Than $1B in Available Funding
A group of national CDFI and community lending associations is urging the White House to release more than $1 billion in already-approved funding to support affordable housing.
The request was outlined in a March 19 letter to National Economic Council (NEC) Director Kevin Hassett. The NEC is a White House agency that advises the president on economic policy and helps coordinate policy across federal agencies.
The letter follows several recent federal actions focused on housing supply, including updates to the Low-Income Housing Tax Credit through the One Big Beautiful Bill Act (OBBBA), Senate passage of the bipartisan 21st Century ROAD to Housing Act, and a new executive order aimed at reducing regulatory barriers to construction.
At the same time, the organizations point out that more than $1 billion in funding is already available but has not yet been put to work. This includes FY2025 and FY2026 funding for the CDFI Fund, Capital Magnet Fund dollars, and remaining Emergency Capital Investment Program (ECIP) funds.
They estimate that releasing these funds could support the construction or preservation of about 100,000 affordable homes. For CDFIs, including credit unions, this kind of funding is often what makes deals possible, especially in communities where traditional financing is limited.
More broadly, the letter highlights a familiar issue: new policies can help, but getting existing funds out the door is one of the fastest ways to increase housing supply. For credit unions engaged in CDFI work, movement on these funds would create more opportunities to support housing development in their communities.
March 10, 2026:
New Deadline Set for FY 2025 CDFI and NACA Program Application Updates
For the first time since September 2025, the CDFI Fund has posted information about the FY 2025 FA and TA Awards. The notice stated that the deadline for FY 2025 application updates is now April 10, 2026.
The Fund previously published amendments to the FY 2025 Notice of Funding Availability (NOFA) on September 25, explaining that the changes were intended to “promote consistency with recent court decisions regarding race-based preferences and reflect the current Administration’s priorities, as reflected in the President’s executive orders.” This was about six months after the original FY 2025 FA and TA application deadline.
Applicants that had reached Step 4 in the scoring and evaluation process were given the opportunity to update their applications by October 27. However, the process was cut short by the fall government shutdown, and applicants have not been able to submit updates since that time.
This update from the Fund is a positive sign that award operations are beginning to move forward again, as well as a hopeful sign that the NOFA for the FY 2026 FA and TA round will be coming soon. CU Strategic Planning has submitted requests to update our clients’ 2025 FA applications in AMIS, the Fund’s awards management system, and has updated files ready to submit.
February 27, 2026:
Bipartisan AFFORD Act Will Strengthen CDFI Fund
The bipartisan Advancing Financial Opportunities through Revitalizing and Developing CDFIs (AFFORD) Act was introduced this week by Senators Steve Daines (R-MT) and Mark Warner (D-VA), along with 28 additional Senate co-sponsors.
The legislation incorporates elements from several previously introduced bills, and of significant importance to CDFI credit unions is the CDFI Fund Transparency Act (S. 2704), which requires the Secretary of the Treasury to testify annually before the Senate Banking and House Financial Services Committees on CDFI Fund operations. This would create opportunities for more conversations on how the program is operating and to develop ways for it to accomplish even more with the funds it has be appropriated.
We at CU Strategic planning have long encouraged Congress to be aware of the regulatory burdens being created by the CDFI recertification process that create an environment where credit union lose or walk away from the CDFI certification.
As CDFIs are aware, the current requirement is to make 60% of the number of loans and 60% of the dollar amount of loans to their Target Market area. But as things stand, particularly in the current economy, it’s very possible for a CDFI credit union to lend more than 70% of the total number of loans to its target market of Low-Income Targeted Populations and Investment Areas and still not qualify as a CDFI because of the dollar-size of loans to a minority of members who are not in that Target Market.
This transparency requirement and the larger AFFORD act as a whole, is a sign of the important role CDFIs play in America's economy. That bipartisan action in these times must be seen for the way CDFIs bring rural, and urban, Republican and Democrats from across the political spectrum.
February 5, 2026:
CDFI Fund Questions Emerge During Treasury’s House Appearance
Treasury Secretary Scott Bessent appeared before the House Financial Services Committee this week to deliver the annual Financial Stability Oversight Council report, where he faced pointed questions from Rep. Joyce Beatty (D-Ohio) regarding the delayed release of FY 2025 CDFI Fund program awards. In a somewhat testy exchange, Secretary Bessent declined to give a yes-or-no answer on timing.
CU Strategic Planning President Stacy Augustine noted, “Because of Secretary Bessent’s on-the-record support for the CDFI Fund, I’m disappointed that he didn’t use this opportunity to gracefully extricate himself from a heated exchange by simply indicating that appropriated funds would be deployed as soon as they were actually received by Treasury from OMB.”
Many CDFI advocates understand the delay in FY 2025 CDFI Fund awards to stem from the Office of Management and Budget’s failure to apportion congressionally appropriated funds, which must occur before Treasury can move forward. We continue to view Secretary Bessent as a supporter of the CDFI Fund and remain hopeful that OMB will soon release the allocated funds.
February 4, 2026:
Second Shutdown Ends: CDFI Fund Secured for the Year
Yesterday saw the House’s passage and President’s signature of the funding bill that cements funding for 95% of the government through September. This includes the CDFI Fund’s $324 million budget for 2026.
Advocates for the CDFI Fund worked tirelessly throughout 2025 to ensure that the Congress’s historical bipartisan support for the Fund remained strong. As a result, the Fund’s 2026 budget is secure at a level similar to the previous several years. This paves the way for continued appropriations success in 2027.
CDFI credit union leaders were part of that advocacy, such as Southwest Louisiana Credit Union’s CEO Chad Miller. “Over the last several months, Southwest Louisiana CU has worked closely with CU Strategic Planning on sharing the story of small CDFIs like ours to our legislators and I strongly believe that this partnership played a key role in ensuring the future of the Fund.”
The credit union has branches in House Speaker Mike Johnson’s district, and Miller explained, “we were able to talk with several key regional offices of our members legislators, including Speaker Mike Johnson’s office, to share the direct impact that CDFI funds have on low-to-moderate income constituents and small businesses in rural Louisiana.”
Other CDFI credit union leaders expressed their reaction to the bill’s passage as well, with New Orleans Firemen’s FCU CEO Judy DeLucca stating, “We are very pleased that Congress has fully funded the CDFI Fund for 2026. This critical support allows us to continue doing the important work of serving people who deserve access to fair and affordable financial services, and it represents a meaningful win for small credit unions across the country. This is exactly the outcome we hoped for.”
While $334 million is a small portion of the roughly $1.2 trillion bill that is now secure, it means a great deal to the nearly 1,400 certified CDFIs nationwide, roughly a third of which are credit unions. The CDFI Fund is much like the institutions it certifies: relatively small in scale, but capable of delivering outsized impact. In 2024 alone, CDFIs collectively deployed over $24 billion dollars in financing to underserved communities, supporting small businesses, affordable housing, and consumer financial stability in places traditional capital often does not reach. The continued funding of the CDFI Fund ensures that this model can keep working where it’s needed most.
January 29, 2026:
Current Appropriations Standoff Presents No Threat to CDFI Funding
Discussions in the Senate this afternoon are focused on separating Homeland Security funding from the broader FY 2026 spending package in order to move the remaining appropriations bills forward.
The bill containing DHS funding is the sole point of contention, and if the Senate votes on the remaining five bills, they are expected to pass. This includes the Financial Services and General Government (FSGG) appropriations bill, which contains the CDFI Fund’s $324 million budget. If the Senate passes this smaller package as expected, it will need to return to the House for another vote, even though the House is not scheduled to return to session until Monday night.
The good news to keep in mind is that funding for the CDFI Fund is effectively settled at this point. The $324 million figure in the Senate bill keeps the agency on a normal funding track for FY 2026 and helps set up a stable funding outlook heading into FY 2027 and beyond.
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