We are following up on our earlier message regarding the March 14 executive order issued by the White House, which raised questions about the future of the Community Development Financial Institutions (CDFI) Fund and the Minority Business Development Agency (MBDA), among others.

As we previously shared, the executive order directed federal agencies to eliminate non-statutory components and functions of several entities, including:

• The Community Development Financial Institutions Fund

• The Minority Business Development Agency

• The Office of National Drug Control Policy

• The Office of Science and Technology Policy

• The Office of the United States Trade Representative

• The Office of Information and Regulatory Affairs

Specifically, the order stated:

“Except as provided in subsection (b) of this section, the non-statutory components and functions of the following governmental entities shall be eliminated to the maximum extent consistent with applicable law, and such entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”

The order also instructed the head of each agency to identify—within seven days—which functions are legally required and explain how they plan to comply with the directive.

What’s New: Treasury Response Protects the CDFI Fund—for Now

While there was much uncertainty over the last two weeks regarding the future of the CDFI Fund, we are pleased to report that the U.S. Department of the Treasury has submitted its response to the Office of Management and Budget (OMB), as required by the executive order. In its response, Treasury confirmed that all 11 programs administered by the CDFI Fund—including the CDFI Program, the Small Dollar Loan Program, and the certification of CDFIs and Community Development Entities—are statutory and will continue to operate.

This is a positive development. However, the Treasury Department did not rule out future changes. In its report, the department stated: “Accordingly, the CDFI Fund is performing its statutory functions as required by law.” It also noted: “On an ongoing basis, the Treasury will evaluate the CDFI Fund to identify opportunities for improvement and enhance efficiencies.”

From what we can gather, activities at the CDFI Fund continue at this time.

Update on the Minority Business Development Agency (MBDA)

While the CDFI Fund has received temporary assurance of continued operations, the Minority Business Development Agency (MBDA) is facing significant challenges as a result of the March executive order. In March, nearly all of the agency’s approximately 50 employees were laid off, and on April 9, the remaining five career staff received Reduction in Force notices. Although MBDA remains authorized by statute, these actions effectively render the agency dormant.

If these changes are impacting your community, we encourage you to reach out to IEDC and your members of Congress to share how MBDA programs have supported local businesses and what their absence could mean for your region.

We will continue to monitor any additional changes to CDFI and MBDA and share updates as they become available.

Please do not hesitate to reach out if you have questions.