The U.S. Department of the Treasury announced on Apr. 27 that it has started a review of certified Community Development Financial Institutions (CDFIs) to identify possible violations of law or CDFI requirements and ensure proper use of federal assistance.
The review is aimed at making sure CDFIs that receive federal funds are acting responsibly with taxpayer money. The Treasury said this effort is intended to strengthen oversight, promote accountability, and prevent misuse within federal grant programs.
“CDFIs play a critical role in expanding access to capital in underserved communities,” said Treasury Secretary Scott Bessent. “CDFIs that engage in predatory practices and take advantage of the very communities they are intended to serve will be reviewed and, where appropriate, held accountable. We remain committed to enforcing the law and protecting taxpayer resources while supporting the mission of responsible CDFIs.”
As part of this ongoing process, the Treasury is assessing whether CDFIs are following all legal requirements as well as terms outlined in their assistance agreements with the CDFI Fund.
According to the announcement, if violations or abuses are found during these reviews, action will be taken consistent with relevant laws and program rules.
