CDFI Fund's Potential Dissolution Threatens Small Business Capital Access Nationwide

As of October 15, 2025, the future of the Community Development Financial Institutions (CDFI) Fund remains uncertain. In early October, the entire staff of the CDFI Fund, housed within the U.S. Department of the Treasury, received Reduction in Force notices stating that their positions would be eliminated by December 2025.

This announcement comes amid a series of administrative actions that have paused the Fund's operations and created widespread uncertainty about its continuity. The CDFI Fund has stood as one of the nation's most effective vehicles for expanding access to capital in rural and urban communities often left behind by traditional finance. Its network of more than 1,400 mission-driven lenders has deployed billions of dollars in small business loans, homeownership programs, and community facilities.

Eliminating or restructuring the CDFI Fund would have ripple effects across the U.S. economy. Banks that rely on CDFI partnerships to meet Community Reinvestment Act goals could face reduced collaboration opportunities, while entrepreneurs and small businesses might encounter diminished access to startup or bridge capital. Local economies that depend on CDFIs to finance housing, small manufacturing, and community facilities could also face deepening inequities in capital access.

For every federal dollar invested, CDFIs have historically leveraged between six and eight dollars in private and philanthropic capital – a multiplier effect that amplifies each taxpayer dollar into local economic growth. Ensuring the stability of this critical financial infrastructure is not a partisan issue, but a matter of economic resilience and national competitiveness.