Download the Full Comment Letter [PDF]

The Honorable Scott Bessent
Secretary of the Treasury
United States Department of Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220

The Honorable Russell T. Vought
Director
Office of Management and Budget
725 17th Street NW
Washington, DC 20503

Dear Secretary Bessent and Director Vought:

The Conference of State Bank Supervisors (“CSBS”) 1 and the National Association of State Credit Union Supervisors (“NASCUS”) 2 (collectively, “state regulators”) write to express our deep concern over the issuance of “Specific Notice of Reduction in Force” (“RIF”) letters to all employees of the Community Development Financial Institutions Fund (“CDFI Fund” or “Fund”) and encourage swift action to reverse course. The proposed RIF would prevent the CDFI Fund from executing its statutory mandate to support economic growth and opportunity in our nation’s most distressed communities. It would also weaken hundreds of CDFI certified banks and credit unions that rely on their certified status to attract investment and secure training and technical assistance. CDFI Fund support is a vital resource for these community financial institutions, which provide critical financial services in the communities they serve.

The vast majority of CDFIs are credit unions or community banks. 3 As Secretary Bessent pointed out during a Federal Reserve Community Bank Conference last week, these institutions are essential to driving the President’s vision for Main Street financial prosperity. 4 That is especially true of CDFIs, an estimated 20% of which operate in “persistent poverty counties” 5 and which are dedicated to helping residents in those counties start businesses, buy their first homes, or build community facilities.

With bipartisan federal support, CDFIs have a three-decade track record of being one of the most efficient and effective vehicles for catalyzing private capital and promoting growth through public-private partnerships. By one estimate, every dollar injected into a CDFI generates eight dollars in private-sector investment. 6 The loss of the CDFI Fund will undermine the Administration’s vital efforts to encourage investment in Main Street communities across America.

State regulators emphasize that the CDFI Fund has both the statutory authority 7 and the necessary appropriated resources 8 to continue its functions, making the RIF of CDFI Fund employees both damaging and unnecessary.

Given the CDFI Fund’s role in fostering economic development, we urge you to rescind the RIF directed at the employees of the CDFI Fund and continue your past support 9 for this unique and vital program.

Thank you for your prompt attention to this matter. We look forward to continued engagement to make our financial system stronger, more efficient, and more resilient.

Sincerely,