Grounding Trump's Attacks on Agencies
An op-ed on Trump's recent Executive Order targeting the CDFI Fund.
The Trump Administration is moving fast on all fronts. It feels impossible to keep up with the news, let alone offer a coherent rebuttal to each of the Administration’s actions. Steve Bannon describes the strategy as “muzzle velocity:” flood the zone so rapidly that opponents can’t keep up.
But people are still desperately trying to capture and communicate the stakes of what is occurring. For example, looking at the New York Times right now, I see a Ben Rhodes piece on how Democrats can stop the “country’s spiral into autocracy and oligarchy.” It’s more important than ever to have clear, precise writing on what is happening to democratic institutions.
But there is also a need to convey how specific decisions the President (and Elon Musk) are making will hurt individuals, families, and communities (e.g., look at Marketplace’s recent reporting on what happens to the Social Security Administration when it loses staff.)
If the public becomes aware of what Trump’s policies actually do, those policies could quickly become unpopular and undone. That’s because President Trump clearly has a pulse on when his policies begin to alienate his base, and he doesn’t like to push the envelope too far. For example, just last week, he reined in DOGE after the public began to sour on it.
One focus of Wicked Good Policy will be demonstrating how the Administration’s actions are hurting the people the President purports to prioritize. A priority for me will be trying to get this writing out beyond the Beltway. My dear friend and de facto editor
suggested that outlets like USA Today, Time, and Newsweek—ones with broad distributions that reach both diners and the Apple News app—can break through echo chambers.(Of course, today, many people get their news from social media, podcasts, influencers, etc., but my haters tell me I have a face for radio and a voice for silent films, so I’ll stick to writing for now).
I recently wrote for Newsweek about how Trump’s attempted dismantling of the Community Development Financial Institutions (CDFI) Fund will hurt rural Americans and businesses. Supporting Alexander’s assertion, once the article was re-posted to MSN, it got far more engagement than anything I’ve ever posted to X/Twitter (for which I blame many of you!).
The full text of the op-ed is below.
Trump's Latest Executive Order Puts Rural Community Banks at Risk
An executive order President Donald Trump signed on Friday, calling for the federal Community Development Financial Institutions (CDFI) Fund and other agencies to be "eliminated," targets the economic lifeblood of America's rural communities.
When big banks turn away from small towns and rural communities—finding them unprofitable to serve—community banks step in to provide the credit and capital that families and small businesses desperately need. For three decades, many of these community banks have depended on the CDFI Fund, which enables them to serve the economically distressed communities that Wall Street won't lend to.
Consider DeWitt, a rural city in Iowa's easternmost county, which hugs the Illinois border and the Mississippi. Home to just over 5,500 people, the city is small but burgeoning. Since 2000, it's grown the most out of the 14 municipalities in Clinton County. Its high school, Central DeWitt, brings in students from neighboring Grand Mound, Low Moor, and Welton. And the county's annual Tailgate N' Tallboys summer festival brings in stars like Tim McGraw, Jason Aldean, and Jelly Roll.
It's not New York City or Chicago or even Des Moines; it's rural America. But even there, in a typical year before COVID-19, every other day, a family in the county received an eviction notice. When the pandemic hit, building affordable housing to help these families became even harder. Interest rates kept climbing. Lumber, steel, and concrete prices soared. In November 2022, Central Bank of Kansas City, a community bank, stepped in, providing $6.8 million in financing for the development of 36 new housing units in DeWitt—all of which were reserved for families making less than the area's average income.
Community banks like these are vital to helping rural America solve economic challenges—from financing affordable housing to providing mortgages, small business loans, and agricultural loans. Today, they make up 72 percent of all bank branches in rural America. But they have been at risk for years, and now face a direct threat in the president's executive order.
From 2000 to 2020, the number of banks in America plummeted from 8,315 to 4,277, due in large part to increased concentration in the banking sector. As the number of banks closed, so did the number of bank branches. More than 2,000 closed shop in rural America during those two decades. The president's attempted gutting of the CDFI Fund will only exacerbate this trend, hindering community banks from accessing federal support.
Offering a range of resources, the CDFI Fund helps accredited financial institutions lend to individuals, families, and businesses that struggle to get access to credit or capital elsewhere. Just look at what it did with the 2021 Emergency Capital Investment Program (ECIP).
Through ECIP, the Treasury Department injected more than $8.5 billion into community banks—84 percent of which were accredited CDFIs—so they could lend in the rural areas, Tribal nations, and impoverished communities that big banks often ignore. In just 18 months, these community banks took those investments and used them to originate over $58 billion in loans for affordable housing development, new restaurants, child care and health care facilities, and more.
Over $10 billion of those loans went to rural communities. The Central Bank of Kansas City is an example of one CDFI that used this funding to help its local community. Another example is Southern Bancorp, a CDFI in Arkadelphia, Arkansas. This community bank leveraged its ECIP investment to make a $94,000 commercial loan for a family health care clinic in Ashley County, Arkansas—a county that ranks in the bottom quartile for health outcomes in a state that ranks near the bottom of the country. Importantly, this new facility provides transportation for low-income residents, addressing a common barrier to accessing care in sparse rural areas.
On the back of the ECIP investments, America experienced an unprecedented boom in small businesses. In 2024, Americans started more than 435,000 new businesses per month—a rate 81 percent faster than the decade preceding the pandemic. While CDFIs account for a fraction of the nation's business lending, today they manage $304 billion in loans for more than 4.3 million businesses and 5,000 community centers, like child care centers and health care facilities.
It's no wonder CDFIs have broad support. The Senate CDFI Caucus has bipartisan co-chairs in Senator Mark Warner (D-Va.) and Senator Mike Crapo (R-Idaho) and 28 total members split evenly by party. In recent years, a coalition of some of America's largest companies—from Google to McKinsey to PayPal—pledged to collectively deposit more than $1 billion into CDFIs to enable greater lending.
It's rare in Washington to have both bipartisan and private-sector backing. CDFIs have earned that support through their track record of success. President Trump's chainsaw approach to the federal government now threatens these community banks—and the communities they serve. If, as he says, he truly believes in supporting the institutions that make America great, he should be supporting the CDFI Fund. As many of his Republican colleagues already know, CDFIs provide affordable financial services to millions of working families that helped put this president in office.