Last Friday, the White House released an Executive Order that restricts the ability of the CDFI (Community Development Financial Institutions) Fund, the Minority Business Development Agency (MBDA), and several other federal agencies and programs to carry out the critical work they do to support the most vulnerable and disadvantaged communities in the country.
The Executive Order limits the authority of both the CDFI Fund and the MBDA by prohibiting them from engaging in activities that are not explicitly mandated by law, and what is legally permissible must be interpreted as narrowly as possible.
“This is the latest action in the Administration’s ongoing campaign to divest from critical federal programs that facilitate a healthy and thriving economy locally and nationally. Scaling back programs that support and invest in small businesses and much needed affordable housing in communities across the country, including low-income Asian American, Native Hawaiian, and Pacific Islander communities, will have a negative ripple effect by increasing disparities,” stated National CAPACD CEO Seema Agnani.
The CDFI Fund, a historically bipartisan entity, provides funding and resources to mission-driven financial institutions to help them support socially and economically distressed communities through transformative investments in housing, small business creation and growth, and community development. In 2023 alone, CDFIs, with a proven track record of success, managed $458 billion in assets used to promote community ownership, economic resilience, and cultural preservation. CDFIs support over 100,000 entrepreneurs annually, deploy over $100 billion in financing to develop affordable housing, and provide safe and affordable home loans.
The MBDA’s network of Business Centers and technical support programs have facilitated the growth of minority businesses by helping them find sources of capital and contracting opportunities, assisting them with financial management and planning, and identifying new markets for investment. In 2023 alone, the MBDA helped minority businesses access more than a billion dollars in capital and close to 4 billion dollars in contract awards, and empowered these businesses to create more than 19,000 jobs.
National CAPACD urges Congress and the Administration to preserve the CDFI Fund and the MBDA’s abilities to fully function in service of their mission. It is imperative that they are able to continue to deploy capital, create jobs, build affordable housing, and preserve community and cultural institutions that strengthen local, inclusive economies.