Federal government expands lending to underserved communities via CDFIs
S. 2718 — A bill to amend the Community Development Banking and Financial Institutions Act of 1994 to provide for capitalization assistance to enhance liquidity. · Filed by Mark Warner (D-VA) · 6 cosponsors · Introduced Sep 4, 2025 · Referred to committee
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What it does
This bill amends the Community Development Banking and Financial Institutions Act to allow the federal government to buy loans from community development financial institutions (CDFIs), provide loan guarantees and credit enhancements, and inject capital to improve their liquidity. The Fund can now work with a broader range of organizations—not just CDFIs themselves—to purchase CDFI loans and expand lending to underserved communities, with annual reporting to Congress through 2028.
Why we flagged it
The bill's core function is to expand federal liquidity support for community development financial institutions through loan purchases, guarantees, and credit enhancements. It is a targeted public-finance mechanism designed to increase lending capacity in underserved markets, not a tax break or deregulation.
What the text implies
- The bill allows non-CDFI organizations to receive federal funds if they meet broad 'community development' criteria, potentially widening the pool of intermediaries and creating discretionary selection authority that may lack transparency.
- Annual reporting requirement ends in 2028, creating a sunset on accountability measures; Congress would need to affirmatively reauthorize to maintain oversight beyond that date.
The full analysis lists 4 implications of this text.
Who stands to gain
community development financial institutions; regional and community banks; loan servicers and intermediaries