On April 9, President Biden released his long-awaited budget proposal outlining his administration’s federal spending priorities for fiscal year (FY) 2022. The Biden budget recommends $330 million in funding for the CDFI Fund in FY 2022. While this funding level is an increase over the FY 2021 funding level of $270 million, it is far below the funding level needed to advance the Biden Administration’s stated goals of reducing economic inequality and the racial wealth gap.
Throughout the pandemic, CDFIs have demonstrated their ability to deliver critical federal relief funding to financially underserved communities — and are essential partners in ensuring an inclusive economic recovery. The federal government recognized this important role and made a down payment on the CDFI industry through the funding provided in the December 2020 COVID relief bill, HR 133, but more must be done.
“To truly move the needle on the systemic economic challenges facing underserved communities, the CDFI industry needs sustained investments of at least $1 billion annually for the CDFI Fund,” said Lisa Mensah, president and CEO of Opportunity Finance Network. “This proposal falls short.”
While a president’s budget is rarely enacted into law as proposed, it does signal the Administration’s spending priorities as Congress begins its work on federal funding for the upcoming fiscal year. Now the appropriations process will begin on Capitol Hill, and the CDFI industry must advocate for Congress to provide $1 billion for the CDFI Fund.