Policy and Legislative Updates for Credit Unions
February 10, 2025

Latest update:
CDFI Fund Grant Evaluator Contracts Under Review
The CDFI Coalition is reporting that the Department of the Treasury is evaluating several hundred contracts on the recommendation of the Department of Government Efficiency (DOGE) today, which include the cancellation of several hundred contracts. Among these are the evaluations of NMTC allocation applications, as well as CDFI and NACA applications.
The CDFI Fund uses outside, contracted grant scorers as part of its evaluation process for CDFI grant applications. If these contracts were to be canceled, it would create a personnel burden on the staff of the CDFI Fund, but would not necessarily prevent these applications from being scored.
The CDFI Coalition’s 2025 Advocacy Campaign includes congressional contact lists and sample emails for staffers in support of CDFI Fund appropriations.
February 10, 9:00 am PST
CFPB is Halting Operations
The new Director of the Office of Management and Budget Russel Vought directed the Consumer Financial Protection Bureau (CFPB) over the weekend to stop work on proposed rules, suspend the effective dates on any rules that were finalized but not yet effective, and stop investigative work and not begin any new investigations, and cease all supervision and examination activity. The offices of the CFPB headquarters in Washington, D.C. will also be closed this week. Consumer complaints may still be made on the CFPB website, although the home page of the site returns an error message.
The agency was created under the Obama administration to protect consumers following the 2008 financial crisis.
The impact this will have on CDFIs at this point is uncertain, but there is a possibility it may impact implementation of regulation of overdraft protection and other fees in the recertification process. The CDFI Fund has not yet made any statement about whether the changes to the CFPB will have any impact on its interpretation of the new CDFI certification guidelines.
Update: February 7
Rodney Hood, Champion of Credit Unions and CDFIs, Named Acting Comptroller of the Currency
Rodney Hood, former NCUA board member under two administrations and chairman of the NCUA during the Trump administration, has been named acting Comptroller of the Currency and is set to be sworn in on Monday. While Hood is not expected to be a candidate for the permanent position, history suggests that his tenure could be significant — Michael Hsu, who was initially appointed as an acting Comptroller under the Biden administration, served in the role for over three years.
A Champion for Credit Unions & CDFI Expansion
The Office of the Comptroller of the Currency supervises national banks and federal savings associations. The Comptroller also serves as a director of the FDIC and member of the Financial Stability Oversight Council and the Federal Financial Institutions Examination Council. Hood brings to the position a history with both credit unions and Community Development Financial Institutions (CDFIs).
As NCUA Chairman, Hood was a key advocate for credit unions seeking CDFI certification. In 2021, he launched the streamlined CDFI qualification process, a critical component of ACCESS, the agency’s financial inclusion initiative. His leadership made it easier for federally insured, low-income credit unions to secure CDFI certification, unlocking new funding opportunities and expanding their ability to serve underserved communities.
Hood’s lasting impact on financial empowerment efforts continues to benefit credit unions and the communities they serve.
What’s Next?
Though Hood’s appointment as acting Comptroller is technically temporary, his tenure could extend well beyond expectations. With no immediate successor named, Hood has the opportunity to influence key regulatory decisions and continue championing both credit unions and CDFIs within Treasury and at the OCC.
Update: February 3
District Court Issues Temporary Restraining Order to Block Federal Funding Pause
All US Treasury grantees and contractors received a notification this morning about the Temporary Restraining Order (TRO) issued by the U.S. District Court for Rhode Island in New York et al. v. Trump, blocking the federal government from pausing or delaying financial assistance programs.
The TRO was granted on Friday the 31st to make it abundantly clear that the initial Executive Order initiating the pause on federal funding is not effective against current or future grants and against all federal agencies, whether or not they were specifically named in the Executive Order.
What does that mean?
This means that federal agencies are to continue with all existing and future financial assistance programs that have been allocated. This will remain in place until a preliminary injunction hearing and further court ruling.
How the decision was made
In issuing the TRO, the Court considered the potential for harm on either side, and found, among other things that:
The Executive Branch lacks authority to unilaterally pause federal financial assistance without Congressional approval.
The funding pause likely violates the Administrative Procedure Act (APA) by overriding Congressional appropriations.
The action violates the Separation of Powers Doctrine by improperly asserting executive authority over funds appropriated by Congress.
Update: January 29
Let’s start with a brief recap:
The Trump administration initially issued a memo on Monday, January 27 to freeze or “pause” all federal grant programs with a deadline of 5pm Tuesday January 28. Just before the freeze was to go into effect a federal judge issued an order to delay implementation of the freeze, and finally on Wednesday, the administration reversed course, rescinding Monday’s memo and likely allowing federal grant programs to proceed.
Where do we stand now?
For FY 2024 Financial Assistance (FA) award winners, this means the CDFI Fund will continue moving forward with their normal processes. FA Assistance Agreements are being signed and disbursements should begin soon; Technical Assistance (TA) award Assistance Agreements have not yet been made available.
FY 2025 FA and TA applicants, the process continues as normal. Even before the pause was rescinded, the CDFI Fund has been operating in a matter that demonstrates confidence in the security of this next award round, with “business as usual” communications sent out this week. We are working on the end stages of our credit unions’ FY 2025 applications for a late March submission.
Current award recipients with funds still outstanding (FY 2022 FA/TA and ERP), there is no longer a need to rush any disbursement requests. We are, of course, always available to complete these requests for our clients at the time that’s best for the credit union.
What does this mean for the future?
The Trump administration has stated that the aborted pause order served its purpose to demonstrate federal agencies’ need to abide by the newly issued executive orders. It appears, however, that this is a recognition of the federal government’s need to meet its obligations in disbursing congressionally appropriated funding.
As to what will happen with future budgetary allocations, we’ll repeat what we’ve mentioned before – the CDFI Fund has been a part of the Treasury Department for 30 years. It has strong bipartisan support and was well-funded during the first Trump administration.
Further, newly seated Treasury Secretary Scott Bessent has already indicated his strong support for the CDFI Fund and the CDFI Fund’s programs during his confirmation, saying "I believe that the breadth of the US Financial Services industry is what… differentiates the US economy from the rest of the world and I think the addition of these CDFIs into underserved communities are very important."
In addition, our outside advocacy counsel on Capitol Hill has been meeting with key members of the House and Senate Appropriations and Banking Committees for intelligence on the fluid situation this week and has been receiving reassurance of support of the CDFI Fund and its programs.
Staying informed and moving forward
It’s safe to say that these are unprecedented times for agencies that rely on federal grants and loans for their services. We will continue to follow all legislative and regulatory news that relates to credit unions and CDFIs, in order to continue to help credit unions unlock opportunities that change the lives of their members and communities.
This week’s rapid unfolding of events demonstrates the need to transition our “All Things CDFI” column into an on-going report that can be updated whenever there’s news to share and helping keep you informed on issues impacting CDFI credit unions. We’d like to invite you all to subscribe below to receive email updates from us on these time-sensitive issues as they’re posted. And you’ll be hearing from us soon!
Update: January 27
Appropriations Process Underway: March 14 is Next Deadline for FY 2025 Budget
The “four corners” of Appropriations Senators Susan Collins (R-ME) and Patty Murray (D-WA) and House Members Kay Granger (R-TX) and Rosa DeLauro (D-CT) met last week on “top line” budget numbers for the 12 appropriations bills that need to be completed, passed by House and Senate and sent to President Trump for approval. Word is they have those top line numbers in mind and CU Strategic Planning will be working with all appropriators to keep CDFI Budget numbers as high as possible in the Financial Services General Governance (FSGG) budget which mostly makes up the budgets for the US Department of Treasury.
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