WASHINGTON, D.C (May 5, 2025) |
The Defense Credit Union Council (DCUC) has sent a letter to every member of the Senate CDFI Caucus, including co-chairs Senator Mike Crapo and Senator Mark Warner, expressing deep concern over President Trump’s Fiscal Year 2026 budget proposal to slash funding for the Community Development Financial Institutions (CDFI) Fund by 90%.
DCUC warns that a drastic cut would severely undermine the financial stability of military families, veterans, and underserved Americans.
"The CDFI Fund has been a lifeline for America’s communities, enabling credit unions to expand access to affordable financial services in areas where they are needed most," says Anthony Hernandez, DCUC President/CEO. "Eliminating this support would have a devastating impact on servicemembers, veterans, and their families — many of whom already face significant financial stress."
For over three decades, the CDFI Fund has empowered mission-driven institutions — including nearly 500 credit unions — to deliver critical financial services in underserved communities, many of which are located near military bases or in rural regions. Junior enlisted personnel, who often meet the Fund’s criteria for “Low-Income Targeted Populations,” rely heavily on CDFI backed programs.
Through CDFI support, credit unions have been able to open branches in financial deserts, provide small-dollar emergency loans to military families, offer financial literacy programs, invest in community economic development, and more.
DCUC noted that over 80% of military families report experiencing financial stress — a reality that highlights the important role of trusted, community-based financial institutions.
DCUC’s letter included that in FY2024 alone, CDFI awardees financed over 109,000 small businesses and supported more than 45,000 affordable housing units, channeling $24 billion into underserved areas. These investments help veteran entrepreneurs launch businesses, assist military families in buying homes, and counter the harmful impact of predatory lending practices.
DCUC reminded that CDFI Fund is backed by bipartisan support and cautions that drastic funding cuts would undo decades of progress.
“It could force small veteran-owned businesses to shut down, drive financially strapped military families back toward high-cost payday lenders, and leave entire neighborhoods starved of investment, many which surround our nation’s military installations. The cost of eliminating the Fund far outweighs any short-term budget savings, as it would squander decades of investment in economic revitalization and financial readiness for those who serve our country.”
DCUC also expressed support for the proposed $100 million Rural Economic Development program to be housed within the CDFI Fund in the FY2026 budget.
“Many of the military communities our credit unions serve are in rural areas, and we agree that investing in rural economic prosperity is vital. The CDFI model has already proven effective in stimulating growth in rural and Native communities. We would like to learn more about this carve out and how this will improve military and veteran communities,” the letter read.
“DCUC is committed to advancing financial readiness and opportunity for those who serve our country,” says Hernandez, “and urge lawmakers to reject harmful funding cuts and uphold the CDFI Fund’s legacy of empowering underserved communities nationwide.”
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.