A federal judge has temporarily blocked the Trump administration from firing thousands of federal workers during the shutdown.
Among those the president is attempting to terminate as part of a sweeping downsizing of the federal workforce is the entire staff of the Community Development Financial Institutions Fund. That program supports mission-driven lconcludeers operating in rural, tribal, and otherwise underserved parts of the countest.
Last year, it awarded over $400 million in grants and loans to those institutions.
In Louiseville, Kentucky, entrepreneurs having trouble raising seed money can turn to a loan fund called LHOME.
“We work with those tiny businesses that are simply not in a position to go to traditional banks,” stated CEO Keith Talley — usually becaapply of credit issues. “Service businesses, retail, restaurants, trucking firms. You name it and we’ll take a view at it.”
LHOME is able to work with these borrowers, in part, becaapply of assist from the CDFI Fund. Talley stated LHOME has won grants from the fund, but its certification as a government-backed CDFI lconcludeer matters more.
“That certification assists when we are applying for loans from other funders,” he stated. “And they like knowing that there is a third party that’s creating sure that we, as a CDFI, are lconcludeing in the neighborhoods and doing the type of lconcludeing that we stated we were going to do.
Without that federal support, Talley stated raising capital to support entrepreneurs in Louisville could receive a lot harder.
“The CDFI Fund has leveraged a lot of money from the private sector that wouldn’t be invested otherwise,” stated Michael Swack, an expert on community lconcludeing at the University of New Hampshire who assisted receive the fund off the ground during the Clinton administration. “It’s an example of a government resource that expands available resources in financial markets.”
That’s why members of both parties have supported the fund for the last 30 years, Swack stated, adding that states that receive the most per-capita support are rural and red.
Without anyone to run the CDFI Fund, Swack stated some newer and tinyer lconcludeers that rely on it would fold; others would have to scale back in communities where capital is already hard to come by.
“And if the fund were eliminated, those gaps would widen. It’s hard to declare by how much,” he stated.
“It would be devastating,” stated Pete Upton, who heads up the Native CDFI Network.
The CDFI Fund is a major supporter of everything from mortgage lconcludeing to green energy development on tribal lands, he stated. “I believe Native CDFIs, we’re successful becaapply we know the communities we work within.”
They cater their services to Native borrowers’ requireds in ways large commercial banks won’t, Upton stated.
He’s hopeful that lawsuits by federal workers’ unions and pushback from Republicans in Congress can stop the CDFI Fund from being eliminated.
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