House, Senate Clash Over Financial Services Funding Bills

Learn why the future of both the CDFI Fund and CFPB hang in the balance as the House and Senate release their respective Financial Services funding bills.

David Baumann


Jul 17



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David Baumann

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David Baumann

A squiggly pink arrow pointing downward and to the right.

Future direction of CDFI Fund and CFPB hang in the balance.  

Setting up another fight with the House, the FY24 Financial Services Appropriations spending bill approved by a Senate committee Thursday would make no changes to the CFPB’s structure.

In fact, neither the Senate bill nor the accompanying Senate Appropriations Committee report even mention the bureau.

The House, on the other hand, wants to overhaul the agency’s structure and funding.

The Senate bill and report were not available when the committee approved the bill on Thursday; they became available Friday morning.

And contrary to information provided Thursday, the Senate bill includes a $10 million increase for the CDFI program, which would bring its overall funding to $334 million in FY24.

The information provided Thursday had indicated the Senate bill would call for $324 million for the program—the same as it received this year.

The House Appropriations Committee, on the other hand, approved an FY24 funding bill that calls for cutting funding for the CDFI program to $278.6 million.

House and Senate Divide

CDFI funding is just one of the differences in the two bills approved Thursday. As in the past, the House bill includes dozens of policy riders proposed by Appropriations Committee Republicans. And the Senate, as usually is the case, did not include many of those riders.

Following are a few of those policy issues that currently divide lawmakers.

CDFI Certification

In addition to the funding cut, the House bill report expresses concern about the overhaul of the CDFI Certification process, which has long been delayed. The House committee said members are concerned that the new process would result in many rural financial institutions losing their certification.

The Senate bill report does not include that language. Instead, the document states that the CDFI Fund should develop measures to increase the share of investments in high-poverty census tracts that have a poverty rate of at least 20 percent as measured by the 2017–2021 5-year data series available from the American Community Survey of the Census Bureau, as well as any other impoverished areas the CDFI Fund determines appropriate to target.


The House bill would transform the CFPB into a five-member commission and subject the agency to the annual appropriations process.

The bill also calls for the agency to receive $635 million in FY24.

The Senate bill would maintain the current structure of the agency, which is run by a single director and would keep its funding mechanism in place, with the agency drawing its funding from the Federal Reserve. That funding mechanism is the subject of a Supreme Court case in which the Consumer Financial Services Association of America argues that the current setup is unconstitutional since the agency is not subject to the annual appropriations process.

Reaction From Credit Union Trade Groups

In recent days, CUNA and NAFCU officials have weighed in on the CDFI funding, along with other issues being considered by the committee.

In a letter to Senate appropriators, CUNA President/CEO Jim Nussle said his organization continues to push for the CDFI program to receive $500 million in FY24.

He also said CUNA is in favor of providing $6 million to the NCUA’s CDRLF program. That program would receive $3.5 million next year in both the House and Senate bills.

Likewise writing to Senate appropriators, Brad Thaler, NAFCU’s vice president for legislative affairs, said the trade group continues to push for at least the funding levels that were contained in President Biden’s FY24 budget. That budget called for $341 million for the CDFI program and $4 million for the CDRLF.

Thaler additionally raised concerns about the CDFI program. He said that several credit unions have reported having to wait more than 12 months for a certification determination, while others have said they were decertified with no chance of remedial action to become recertified.

The letter noted further that the CDFI Fund is in the midst of making changes to the certification process that likely will make it more difficult for small credit unions and MDIs to become certified.

“As part of this process, the Fund has paused accepting new certification applications since last fall with no clear end date to this pause in sight,” Thaler wrote.


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