Our Statement on the Importance of Preserving the CDFI Fund After March 14 Executive Order
Last Friday’s Executive Order affecting the Community Development Financial Institutions (CDFI) Fund directly impacts our work here at Mountain Association. For decades, we have served Kentucky’s mountain communities as a Community Development Financial Institution, providing affordable and flexible capital and free support to small business owners who may not qualify with traditional lenders like banks.
The primary mission of Community Development Financial Institutions (CDFIs) is community development, and they are regulated by the CDFI Fund, established in 1994. They hold our industry to the highest of standards, manage $304 billion in loans, and run several programs which CDFIs across Kentucky, Appalachia and America rely on. With a strong fund, CDFIs can continue expanding access to capital, building affordable housing, and increasing quality jobs and quality of life in communities that are underinvested in by private and philanthropic sources.
The CDFI model is a strategic investment in America’s economy. Over 1,400 certified CDFIs operate across the US, strengthening communities through local, community-based financial services. Since they were established, CDFIs have used federal dollars to build affordable housing, support local businesses, and open pathways to financial independence, leveraging $1 in federal investment into an average of $8 in private funding. Every dollar invested in organizations like ours via the CDFI Fund fuels local economic activity and prosperity in underinvested regions like Eastern Kentucky. In 2024 alone, Mountain Association invested $9.6 million in 85 businesses and organizations working to create communities where people can and want to live, work, and thrive.
The Executive Order states it is “returning power to local communities,” however, in order to continue to build power in our local communities, we need strong CDFIs that can – and will – support an aspiring business owner with their idea that would help revitalize our Main Streets, that can – and will – invest in a daycare that’s trying to get off the ground in a childcare desert, and that can – and will – provide a mortgage to a young family who wants to buy their own house and build wealth for the next generation. CDFIs understand the economic challenges people face in areas like Appalachia, and we respond to them, taking greater risks than traditional institutions focused on profits.
The CDFI Fund is not just a budget line, but a lifeline for underinvested communities like those in Eastern Kentucky.
We urge policymakers and the public to stay informed and engaged in protecting this vital resource for economic development in our state and beyond.
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We also urge you to tell your story – If you’ve been impacted by CDFIs, share how they made a difference for you!
