Two senior Republican senators expressed their dismay on Tuesday following the Trump administration's drastic move to dismantle the Treasury Department’s Community Development Financial Institutions (CDFI) Fund by terminating its entire staff. This action, orchestrated by the Office of Management and Budget Director Russell Vought last Friday, has sparked significant bipartisan concern.

The CDFI Fund, known for facilitating federal dollars through public-private partnerships to community-based financial entities like banks, credit unions, and other institutions, primarily serves areas traditionally neglected by larger banks. These institutions have been pivotal in enhancing the availability of financial services in underserved markets.

Senator Mike Crapo (R-Idaho), co-chair of the Senate Community Development Finance Caucus, expressed his disappointment to POLITICO, stating, “I was discouraged to see the actions taken to [reduce] the employees, and I’m hopeful that we can get that turned around.” His sentiments were echoed by Senator Mike Rounds (R-S.D.), who affirmed his unwavering support for the CDFIs, acknowledging their significant impact in South Dakota which received $13.3 million in 2024 alone, making it a top per capita recipient of funds.

Rounds emphasized the urgency of the situation, suggesting that a quick resolution could be achieved through a continuing resolution to reopen the government and restore the fund’s operations. Meanwhile, Senator Crapo hinted at legislative actions Congress might consider to counter the administration’s decision, though he refrained from detailing any discussions with Treasury Secretary Scott Bessent or the White House.

The bipartisan effort to restore the CDFI Fund is also supported by Senator Mark Warner (D-Va.), Crapo’s caucus co-chair. On a recent press call, Warner disclosed ongoing efforts with Crapo to draft a bipartisan letter, reminiscent of their March correspondence which protested an initial executive order aimed at curtailing the fund. Warner’s office, taken aback by the firings, is awaiting a response from Bessent to a letter he sent concerning the unexpected dismissals.

Both senators were reportedly surprised by the manner of the dismissals, with Warner noting, “It appears maybe this didn’t come from Treasury, it appears that it came from the OMB. I think this goes against the law.”

The controversy underscores a significant rift within the government over the administration’s approach to community development finance, raising questions about the future of financial support to underserved communities across the United States. The bipartisan pushback from key senators suggests a looming legislative confrontation as they work to reverse the dismissals and restore the fund’s capabilities.