Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released this fact sheet outlining the harmful impacts of the government shutdown—which Trump and Republicans initiated because of their refusal to negotiate with Democrats to protect healthcare for millions of Americans. This fact sheet highlights the negative impact the Trump-Republican shutdown will have on small businesses and communities across the nation, particularly those that have been historically underserved and underrepresented and rely on the Treasury Department’s Community Development Financial Institutions (CDFI) Fund.
Since day one, Donald Trump has waged an all-out war against this vital agency, launching relentless attacks that include halting its operations and proposing severe funding cuts that threaten to dismantle its mission of expanding access to capital in underserved communities. All of these are tactics to accomplish their ultimate goal of getting rid of the CDFI Fund altogether.
The Trump-Republican shutdown will further dismantle the fund and hurt small businesses, vulnerable communities, and the broader economy. The Trump Administration had already delayed the delivery of $324 million in overdue funds to more than 1,400 community banks, credit unions, and loan funds by forcing them to reapply utilizing updated criteria. However, as a result of the shutdown, the CDFI Fund has stopped routine administrative support functions, which will cause even further delays. Given how CDFIs leverage these funds, this will seriously delay the delivery of more than $2.5 billion in affordable loans to small businesses and consumers in rural and urban communities across the country.
This means that small businesses across the country will be unable to access the loans they need to stay afloat, grow, and create jobs. Families and first-time homeowners who rely on CDFIs for down payment assistance or fair mortgage products will face even greater barriers to building wealth and stability. And a wide range of community lenders, including banks, credit unions, and loan funds who serve as a lifeline to Black, Latino, and rural borrowers, may have to sharply curtail their lending activities.
Without CDFIs funded and supported by the CDFI Fund, communities across the country would lose a vital source of economic stability and growth. During the COVID-19 pandemic, when the nation’s biggest banks refused to deliver relief to small businesses and instead prioritized their wealthiest clients, CDFIs filled the gap—ensuring that local businesses, especially the smallest businesses and those owned by women and people of color, could survive. Now, that progress is at risk as the Trump-Republican government shutdown freezes critical funding and threatens to undo years of progress in providing financial access to underserved communities.
Trump promised a “golden age” for America. Instead, all he and Republicans have delivered is hardship for small businesses and more pain for working-class families.
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