In 2018, the then-President issued an official directive focusing on enhancing the capacity of Community Development Financial Institutions (CDFIs). This directive, through governmental action, aimed to bolster the financial strength and operational effectiveness of organizations dedicated to serving underserved communities. These institutions, which include community development banks, credit unions, and loan funds, play a vital role in providing financial services to areas lacking access to traditional banking resources. An example includes directing federal agencies to review their policies and identify ways to reduce regulatory burdens on CDFIs, allowing them to more efficiently deploy capital in distressed areas.
The importance of this action lies in its potential to stimulate economic growth in historically disadvantaged communities. By strengthening CDFIs, the directive aimed to increase access to capital for small businesses, affordable housing, and other vital community development projects. This, in turn, was intended to create jobs, improve living standards, and foster greater economic inclusion. The historical context reveals a continued effort by administrations across the political spectrum to support community development and address economic disparities through targeted financial interventions.
