DCUC Expresses Concern over Potential Elimination of the CDFI Fund

The Defense Credit Union Council (DCUC) is concerned by the decision to eliminate funding for the U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund. As the national voice for credit unions serving our military and defense communities, DCUC knows firsthand that the CDFI Fund is a critical lifeline enabling credit unions to serve underserved populations – including low-income neighborhoods and military families – with affordable financial services.
DCUC has shared its position as it relates to the CDFI Fund in letters to both the U.S. House and Senate.

As of January 2025, there are 495 certified CDFI credit unions across the United States, collectively serving millions of members in economically distressed areas (CDFI Coalition, 2025). We urge policymakers to recognize the profound importance of the CDFI Fund to local communities and to our service members and to reconsider any effort to dismantle this vital program.

For over 30 years, the CDFI Fund has empowered mission-driven lenders to reach Americans left behind by mainstream finance. CDFI credit unions, in particular, are on the front lines of financial inclusion, serving low-income communities that may not have access to traditional banking services.

Many defense-focused credit unions operate in rural or underserved areas around military bases, ensuring service members, veterans, and their families have access to fair and affordable financial options. Notably, over 80% of military families experience financial stress, underscoring the need for trustworthy, community-based financial partners (Blue Star Families, 2024).

The CDFI Fund has been instrumental in helping credit unions fill this need by providing targeted resources to expand outreach and tailor products for vulnerable groups. CDFI certification enables credit unions to access federal funding to address crucial financial needs, including affordable housing, small business financing, and financial literacy programs (CDFI Fund, 2024).

Proven Economic Benefits of CDFI Credit Unions in Local Communities
The economic benefits generated by CDFI credit unions are substantial and well-documented. By channeling public resources into community lenders, the CDFI Fund spurs private investment and fosters local growth.

In Fiscal Year 2024 alone, CDFI program awardees financed over 109,000 small businesses, provided funding for more than 45,000 affordable housing units, and originated more than $24 billion in loans and investments (CDFI Fund, 2025). These numbers represent real families obtaining homes and real entrepreneurs launching businesses because of CDFI-backed credit unions.

Case Studies: CDFI Credit Unions Making a Difference

• Afena Federal Credit Union (Marion, IN) – A small, rural credit union that received a $590,000 CDFI grant in 2022 to enhance its outreach to financially vulnerable families. With this funding, Afena expanded financial coaching and affordable loan options for low-income single parents and retirees raising grandchildren. One member was able to refinance her auto loan, reducing her monthly payment and freeing up enough money to buy new tires for the winter (CreditUnions.com, 2024).

• Fort Randall Federal Credit Union (Wagner, SD) – Used a $3.7 million CDFI Equitable Recovery grant to broaden services across six counties, including Native American reservations where poverty rates approach 49%. The credit union introduced new lending programs and personalized credit-building assistance for tribal members and Spanish-speaking residents, opening 35 new accounts in a single month as previously unbanked residents embraced these services (CUTimes, 2024).

These examples demonstrate how CDFI credit unions provide critical access to financial services, job creation, and economic revitalization in distressed areas.

Consequences if the CDFI Fund Is Eliminated
Eliminating the CDFI Fund would have immediate and severe consequences for credit unions and the communities they serve. Without CDFI grants and technical assistance, many credit unions would lose the resources needed to sustain their community-focused programs. This would lead to:

• Reduced access to financial services for low-income Americans, forcing many to turn to payday lenders and check-cashing services. About 25% of U.S. households are currently unbanked or underbanked (FDIC, 2024).
• Fewer small business loans, cutting off capital for entrepreneurs in struggling communities. CDFIs have financed tens of thousands of businesses and micro-enterprises deemed too risky by traditional banks (CDFI Fund, 2025).
• Economic stagnation in communities that rely on CDFI-backed lending to support job creation, affordable housing, and infrastructure development.
• Additionally, demand for CDFI support already exceeds supply. In 2024, funding requests greatly surpassed available resources, proving that the program needs expansion—not elimination (CDFI Coalition, 2025).

Opportunity Zones and CDFI Credit Unions: Complementary Tools
Opportunity Zones (OZs), created in 2017and strongly supported by the current administration, complement the mission of CDFI credit unions by attracting private investment to the same economically distressed communities that CDFI credit unions serve. OZs offer tax incentives for
investors who provide capital for affordable housing, local businesses, and infrastructure projects in designated high-poverty areas. By the end of FY2020, OZs had generated $48 billion in investments across 3,800 communities (U.S. Economic Development Administration, 2022).

Many CDFI credit unions operate within Opportunity Zone-designated areas, ensuring that as new businesses and housing developments emerge, local residents benefit from affordable loans, homeownership programs, and financial literacy services. CDFI credit unions play a critical role in preventing displacement by offering homeownership opportunities and helping small businesses access financing in these revitalizing areas (Milken Institute, 2024).

DCUC firmly believes that the cost of eliminating the CDFI Fund far outweighs any short-term budget savings. Since its inception in 1994, the Fund has provided over $8 billion in awards, building the capacity of more than 1,400 CDFIs nationwide (CDFI Fund, 2025). To dismantle it now would squander decades of investment in economic development and financial inclusion.

DCUC urges the Administration to reverse its decision to eliminate the CDFI Fund and instead support continued, robust funding for the program. Our nation’s low-income communities, communities of color, and military families deserve access to financial services that empower them to thrive.

Eliminating the CDFI Fund would harm the very people who need support the most—working families, small business owners, and underserved populations, including military members and veterans. We urge policymakers to stand with CDFI credit unions and preserve this indispensable resource,” said Jason Stverak, DCUC Chief Advocacy Officer. “By maintaining the CDFI Fund, we can ensure that credit unions continue to empower hard-working families, support small businesses, and keep our communities—especially those that serve our nation’s defenders—strong and resilient.”