How Will 2024 Presidential and Congressional Elections Impact CDFI Policy Priorities?

Shifting power in DC presents a new landscape for CDFIs 

Read time: 5 minutes

With most of the votes counted, we are now in transition mode.  

Former President Donald Trump won a second term as president, and the Republican Party won control of the Senate and the House of Representatives. Ten new Senators and approximately 60 new Representatives have been elected, providing a rich opportunity to educate new Members of Congress about the work and impact of our industry.  

CDFIs are recognized as a vital private partner to the public sector with broad bipartisan support. CDFIs unlock untapped market segments and broaden financial opportunity in the economy, which appeals to Democrats and Republicans alike. OFN intends to educate the new administration on CDFIs’ ability to meet the economic needs of underserved communities and continue to build on our relationships in Congress.

What to Expect from the Incoming Trump Administration  

The economy was a focal point of the Trump campaign. OFN will work alongside the administration to ensure we build an American economy that works for everyone. While Trump’s economic policy proposals have focused mostly on tariffs and tax cuts, we believe there is an opportunity to showcase the work of CDFIs in supporting economic opportunity.  

President-elect Trump has been releasing information daily about his intended Cabinet appointees. He has committed to an aggressive timeline to name his nominees. Key Cabinet positions will determine much about the policymaking that gets done over the next four years. The Environmental Protection Agency will be led by former Representative Lee Zeldin, who will focus on implementing Trump’s vision for environmental deregulation at the agency.  

Trump has not named a Treasury Secretary, who will oversee the Trump economic plans and the CDFI Fund. It is also still unclear who will lead the Small Business Administration, the Department of Housing and Urban Development, and the Department of Agriculture. We will continue to track and engage with the newly appointed agency leaders as they are announced. The experience and perspective of these nominees will have a significant impact on policy priorities for different departments. We expect the Senate to move quickly next year to confirm the nominees.  

In the first Trump Administration, OFN demonstrated the value of CDFIs to policymakers, particularly through our pandemic response efforts. New officials may be unfamiliar with CDFIs and there are going to be significant efforts to cut government spending and personnel that could impact our work.  

What to Expect in the 119th Congress 

In Congress, Republicans flipped the Senate and will have a 53-47 majority, giving the GOP a wider majority than the Democrats held the last two years. Senate Republicans elected Sen. John Thune (R-SD) as the new Majority Leader. Sen. Thune has been a strong CDFI ally, especially to Native CDFIs working in his state, and delivered remarks at OFN’s 2020 Conference. We look forward to working with him on key issues in the 119th Congress. The bipartisan Senate Community Development Finance Caucus lost two members: Sen. John Tester (D-MT) and Sen. Mike Braun (R-IN), but remains equally balanced with Republicans and Democrats and still represents nearly a quarter of the Senate.

With Republicans maintaining control of the House, Speaker Mike Johnson (R-LA) will retain his role. Although new committee assignments won’t be finalized until after the new Congress is sworn in, announcements of committee leadership roles will start to roll out over the next several weeks.  

Having secured a trifecta – control of the White House, Senate, and House – Republicans are expected to use the budget reconciliation process to achieve many of their policy goals. Top priorities include extending the Tax Cuts and Jobs Act and addressing border security. OFN has advocated for tax credits that benefit CDFIs to be included in the tax package. The Republican party has vowed to cut government spending and reduce the federal deficit. We expect discretionary funding to be cut, likely impacting the CDFI Fund budget. OFN will continue to make the case for CDFI funding, but we anticipate operating in a stricter funding environment.  

What to Expect for the Lame-Duck Session 

For the lame-duck session, the time between the election and the new Congress swearing-in in January, Congress is expected to pass another short-term extension of government funding to allow for the newly elected officials to pass a spending package in the new year for fiscal year 2025. This will include funding for the CDFI Fund. As we covered earlier this year, the House and Senate are $80 million apart in their proposals for the CDFI Fund. Congress is expected to consider a supplemental disaster funding package to assist communities impacted by Hurricanes Helene and Milton during the lame-duck session. OFN is advocating for a Disaster Recovery Fund with $500 million for CDFIs responding to federally designated disaster areas as well as an additional allocation of the New Markets Tax Credit for those communities. Democrats in the Senate are focused on confirming as many judges as possible during their lame-duck session.  

We rely on the practical experience and on-the-ground impact of our members to communicate the importance of the CDFI industry to policymakers. With a significant number of new faces and several key decisions to come through the 119th Congress, we will engage our members to serve as CDFI advocates. You can get started today by using our Policy Action Center.  

Connect With OFN

Subscribe to receive regular updates straight to your inbox and check out our blog for the latest coverage from OFN and the CDFI industry. 
Follow us on social media.

Tags: CDFI Fund, Community Development, Impact Investing, OFN Membership