They're Trying To Kill The Only Fund That Has Our Back

If You Only Have A Minute, Let It Be This One

Hey, I know you’re probably reading this between shifts, between meetings, kids, and life happening in general.
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I know how much energy it takes just to keep things afloat — your business, your work, your people.
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So before anything else, let me say: thank you for landing here. And let me get straight to it.

CDFIs — the lenders who show up when traditional banks walk away — are under attack.

An executive order has already been signed to dismantle the fund that supports them. If that goes through, thousands of businesses like yours — and like the ones I serve every day — will lose access to the capital, technical assistance, and second chances they need to grow.

If you only have a minute right now, please:

Sign the petition to protect CDFI funding:
https://www.ofn.org/ofn-policy-action-center/

It takes just 60 seconds to protect what took decades to build.

Adding your name helps us send a message to Congress

"We’re paying attention. And we’re not letting this go quietly."

That’s the action.

Now, if you want to understand how we got here — and why this fight matters so much — I hope you’ll keep reading. Not just to take action now, but to take better action wherever you go next.

-Wendy

‍Introduction

When the news broke, it felt like a gut punch.

I wasn’t surprised. But that was the first time in a long time that I felt... well, scared.

Scared for our entire small-business community. For the projects we’ve poured our hearts into. For what it means if all this momentum — especially here in Detroit — just stops.

Like — damn. There’s finally something out here that works for us, and now they’re just going to take it away?

My phone was ringing off the hook. Clients were anxious, confused, overwhelmed. And for a moment, I was right there with them.

What happens to the ecosystem we’ve built?

The 160,000 people employed by this system?

And the more than 100,000 new small businesses that rely on CDFI dollars every year?

The idea of adding even one more hurdle to the sea of obstacles entrepreneurs already face is hard enough to fathom — but this isn’t just any hurdle. It’s the biggest one — the one we’ve spent five generations (and counting) fighting against, and the one that at least 83% of entrepreneurs already identify as their greatest barrier to starting up.

Now it’s being shoved right back in their faces — turning our communities and our work into cannon fodder in yet another fight we didn’t start, but somehow always end up bleeding in.

And then it was everywhere — LinkedIn, Instagram, newsletters. Posts and letters from CDFI leaders, funders, and nonprofit heads voicing their fears and frustrations. It was heavy. It is heavy.

Because these aren’t just budget line items — they’re lifelines.

And it hurts to think we might be witnessing the slow death of a critical ecosystem that was just beginning to work.

Detroit Was Balling Before The Pandemic

Thanks to years of CDFI support

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In the decade prior to COVID-19, Detroit had gone from a city where entrepreneurs felt they had to “leave in order to succeed” to one that redefined what it meant to “boss up.”

‍We’ve become a national model for how funding, resources, and second chances can reshape communities — awarding millions to those bold enough to build here before the pandemic, before the wave, before it was popular to be an entrepreneur.

We were proving that investing in underestimated businesses feeds families, rebuilds neighborhoods, and strengthens the very networks that hold cities together.

‍And CDFI support has remained at the center — the driving force, the thing holding it all in place when everything else felt uncertain. Without them, the small-business economy would cripple — not just in Detroit, but in every community across the country where they have a presence.

There are business owners — right now — with real deals on the table.

People who’ve spent years grinding toward something that could change everything: for their families, for their blocks, for generations coming behind them.

And the only thing standing in their way is whether these dollars stay on the table.

It feels like watching a wildfire close in on our community.

Not someday. Today.

And all we can do is pray relentlessly for the little rain we have to keep trickling down.

That’s what this moment felt like — holding as tight as we can to a resource that we already have too little of. And there’s too much at stake to sit still.

In the middle of all the initial panic, I realized something:

Most people don’t even know what’s at stake.

They don’t know these programs exist until someone like me shows them. They don’t know that these dollars are the difference between barely surviving and actually building something that lasts.

That’s why I’m writing this.

Because the story can’t stop with another daunting headline. We need to talk about what’s happening — not just in policy, but in real life. Not just on Zoom calls filled with high-level stakeholders and officials, but right here in our own communities.

We need to educate — not just the folks already in the loop, but the people who need or know someone who will need these funds. Because once they do? Their entire path shifts. Their dreams get real. They finally see their business as something they can build — not just wish for.

These funds are that powerful. And that necessary.

And if you’re still wondering what kind of impact they really have, let me introduce you to someone who can help you see it clearly:

Darryl Young

Darryl is a restaurant owner on Detroit’s west side — and one of my clients. But before that, he was trying to rebuild his life after incarceration — dreaming big but unsure how to make it real.

Last year, thanks to the access and guidance made possible through CDFI support, Darryl became the largest restaurant grant recipient in Motor City Match history, earning a $100,000 award to open his first business: Momma G’s.

Because he was locked up, Darryl didn’t have time to build credit, savings, or a long job history.

And when Darryl walked into a traditional bank — after putting $200,000 of his own money into his restaurant — all he wanted was a little help to get the doors open.

But the bank took one look and said, “Too risky.”

They didn’t ask about the work he had put in.
Didn’t ask about the progress.
Didn’t care about the vision.

All they saw was his past — and just like that, it was a no.

Plain and simple: the traditional lending system isn’t built to give people like Darryl a second chance.

When the grand opening of Moma G’s kicks off in summer 2025, CDFI support will have helped Darryl do so much more than open the doors to a restaurant.

They’ve helped him open doors for himself, for his family, and for every founder coming up behind him — who’ll get to walk through that same door, too.

This is what we’re fighting to protect.

Because when CDFI dollars are on the chopping block, it’s not just policies being threatened — it’s people.

And their dreams. ‍

CDFIs offer the kind of second chance that changes the whole trajectory of someone’s life.

And Darryl’s story? It’s not a one-off. There are so many others whose success started with access. And that’s exactly what CDFIs were built for.

But it raises an even bigger question:

Who are CDFIs? And why do they matter so much?

Who are these organizations that, quietly and consistently, are behind some of the biggest wins in the small-business ecosystem?

And what makes them so critical that losing them shuts the door on generational wealth for millions of entrepreneurs?

Let’s break it down.

So, Who Are These Quiet Giants?

If the stakes are this high, then we owe it to ourselves — and our communities — to understand who’s really been holding us down.

Because the truth is, most people don’t even realize who’s behind the storefronts, grants, and startup capital making so many of these small-business dreams possible.

They’re called Community Development Financial Institutions (CDFIs for short), and if you’ve never heard of them? You’re not alone.

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It’s one of those acronyms that floats through the small business space — vague, technical, easy to overlook. And here’s the kicker: plenty of entrepreneurs have received support from one without realizing they were being backed by the same federal investment streams that fund national infrastructure — only with CDFIs, the investment is in us, for once.

Us being the founders who never had a trust fund to fall back on — the women building from scratch, the Black and Brown visionaries rewriting what ownership looks like, the rural creators turning isolation into innovation, the low-income dreamers with ideas as big as anyone’s — just no one to help carry them forward.

For the 99% who weren’t born into capital, CDFIs are the first real shot at building something that lasts.

Certified by the U.S. Department of the Treasury, CDFIs operate on a simple but powerful belief: capital alone isn’t enough. It must be paired with access, trust, and support.

These lenders offer many of the same services as traditional banks — small business loans, mortgages, community financing — but with one major difference:

They’re built to say yes in places where most banks say no.

They don’t rely solely on credit scores or collateral. They don’t require generational wealth as proof of “worthiness.”

Instead, they look at the whole picture — the business idea, the impact, and the entrepreneur behind it.

That’s what gives so many overlooked entrepreneurs their first real shot.

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Each type plays a unique role, but they all share one goal: to expand economic opportunity by investing where it matters most.

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‍What Makes CDFIs Different from Traditional Banks?

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That doesn’t mean CDFIs hand out money easily. In fact, they often require more documentation — not to gatekeep, but to make sure you’re ready.

Because when a CDFI funds a business, they’re not just cutting a check.

They’re stepping in where traditional banks said no.
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They’re betting on the businesses the system still overlooks.
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They’re investing in a future — one that wouldn’t exist if we were still counting on banks that keep shutting Black founders out.

Because here’s the truth:

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So if the banks have always said no, what made anyone believe we were ever worth a yes?

Where did that belief come from?
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Who dared to build with us instead of without us?

To answer that, we have to look at where CDFIs came from — and why they had to exist in the first place.

Before there were acronyms and federal programs, there was a neighborhood that banks had given up on.

That was, until four revolutionaries stepped in.

Fifty years ago.

In South Shore, Chicago.

With a simple mission to start a new kind of bank for their community.
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And that one move...

Set off a whole movement.

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The History of CDFIs: From Redlining to Revolution

In the early 1970s, Chicago’s South Shore — once a vibrant, middle-class area — had become a textbook case of urban disinvestment.

Redlining maps marked it “high risk.” White flight was in full swing.

Property values were falling. Businesses were closing.

And banks were quietly leaving, taking capital and opportunity with them.

‍But in 1972, something radical happened.

Four unlikely revolutionaries — Ron Grzywinski, Mary Houghton, James Fletcher, and Milton Davis — bought a failing bank in the heart of South Shore.

Not to flip it.

Not to gut it.

But to transform it.

‍They renamed it South Shore Bank and set out to prove what the financial system had long denied: that Black neighborhoods, low-income families, and overlooked entrepreneurs weren’t “risky.” They were systematically excluded. And given the right support, they could thrive.

ShoreBank Went Beyond Compliance — It Created a New Playbook

ShoreBank wasn’t just a bank. It represented a belief — that access to capital shouldn’t depend on your ZIP code or skin color. And its leadership stood on that long before the government offered any legal backing through laws like the Home Mortgage Disclosure Act (1975) or the Community Reinvestment Act (1977).

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ShoreBank broke ranks with mainstream banks by making lending decisions based on the actual viability of the business — not racial demographics or redlined maps.

They offered mortgages to Black homeowners. Funded rehab projects to block out slumlords. Made small business loans to local entrepreneurs — even when they didn’t have perfect credit or a family member to co-sign.

And they didn’t just lend. They taught. They walked with borrowers. They built what we now call technical assistance into every relationship — not for PR, but because it worked.

This holistic, place-based approach — investing all of the bank’s resources back into the local community — was virtually unprecedented in U.S. banking at the time.

Despite lending in a low-income, transitioning neighborhood, ShoreBank’s loan performance from 1973 to 1978 was remarkably strong. Key metrics from its early years include:

• Extremely low default rates: Fewer than 7 out of every 1,000 loans went unpaid — way better than most banks. That shocked critics who assumed lending in this community would be too risky.

• High repayment and low delinquency: Nearly all ShoreBank borrowers — about 98–99% — paid back their loans on time. This proved that low-income and minority communities weren’t risky to lend to; they were just unfairly underestimated.

• Asset quality comparable to traditional banks: By the late ’70s, ShoreBank’s loans were just as solid as those at regular banks — sometimes better. Even during a recession, they kept losses low, proving their lending approach worked, even in so-called “risky” areas.

By helping borrowers succeed, ShoreBank showed that lending in low-income communities could be fair and profitable — not a bad investment like many assumed.

Its success lit a fire — and flipped the whole script for the lending industry in America.

It forced this country to reckon with a lie it had told for generations:
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That Black folks — our neighborhoods, our businesses, our dreams — were too risky.

And it didn’t just change how banks saw us.

It shifted power.

And the ripple effects?
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Still moving through every CDFI, every federally backed home loan, every Black-owned business that’s been told “yes” since.

The impact was so unprecedented that President Clinton later dubbed ShoreBank “the most important bank in America.”

And the national movement that followed would forever change lending in this country.

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A New Way of Banking Turned National Movement

By the early 1990's, ShoreBank lit a fire.

Over 100 mission-driven lenders had popped up across the country, using their blueprint to fund housing, small businesses, and community dreams.

Even if they didn’t all call themselves “community development banks,” they were doing the work — from neighborhood credit unions to statewide loan funds.

That kind of success got Washington’s attention.

Senator Donald Riegle from Michigan stepped up and pushed a law to take ShoreBank’s model nationwide. That law — the Riegle Act of 1994 — created the CDFI Fund to get capital to the people and places banks had ignored.

And where did they start?

Right here in Detroit. And over in Cleveland.

‍Detroit and Cleveland were the first real test:

Could ShoreBank’s model work outside Chicago, now that it had federal backing?

These two cities were chosen on purpose.

Each carrying deep economic scars, heavy history — and a whole lot to prove.

1. They were hit hardest by disinvestment.
Detroit and Cleveland weren’t just struggling — they were what it looked like when banks, big business, and the government all dipped out.

Redlining? Heavy.

Factories? Gone.

Black communities? Shut out of homeownership and business loans for generations.

So if this model could work here — where folks had been written off — it could work anywhere.

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2. They also had the heart to fight back.
Both cities had strong roots in community organizing, churches pushing for economic justice, and a rising wave of Black-led nonprofits and business advocates. The local energy was there — they just needed real partners and real capital.

That’s why ShoreBank didn’t have to roll in trying to save the day.

They connected with folks already doing the work.

Local organizers, churches, and Black-led nonprofits weren’t just involved — they were central.

This wasn’t just expansion. It was a make-or-break moment.

The stakes were high, and the spotlight was on.

If the approach held steady here, it would send a clear message to D.C. and Wall Street alike: this kind of lending isn’t a gamble — it’s a smart, grounded investment.

Detroit and Cleveland were the blueprint for what could come next.

And oh, did Detroit show out.

By the time the CDFI Fund touched down in Detroit, the city’s economy had been hollowed out, and banks had stopped lending in most neighborhoods.

That all changed in 1998, when ShoreBank Enterprise Detroit (SED) was established as a nonprofit affiliate with the mission to revitalize economically distressed neighborhoods — specifically on Detroit’s east side.

Initially, SED focused on providing down payment assistance and credit counseling.
By 2001, it had expanded operations citywide, launching a small business loan fund that grew substantially over time.

The early traction of ShoreBank Enterprise Detroit showed that, with the right infrastructure and trust-building, lending in deeply distressed communities could still be done — and done responsibly.

Today, ShoreBank Enterprise Detroit operates as the Detroit Development Fund (DDF) — a certified nonprofit Community Development Financial Institution (CDFI) and one of the most significant and impactful lending institutions in the city of Detroit.
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To date, DDF has provided over $85 million in small business loans to Detroit-area entrepreneurs.

And that’s just the tip of the iceberg — one CDFI in Detroit.

Three Decades Later, We Are Living Through A Golden Era of CDFI Impact In Detroit

And when we combine available data for all Detroit-based CDFIs that have come online since then, the outcomes are far more significant than DDF's impact alone:

This means that for every dollar of direct capital deployed by these CDFIs, approximately $4.43 in total investment has been generated.

And beyond these figures, Detroit has seen an additional $1 billion invested in under-market-rate housing since 2019, with plans for another $1 billion over the next five years.

By 2030, the total direct and leveraged impact of CDFIs in Detroit will total nearly $6 billion since the first one was established in 1996.

When the investment landed, our city didn’t just rise to the occasion — we ran with it.

And the response made one thing clear: given the chance, Detroit knows exactly how to flip real capital into serious change.

So Don’t Get It Twisted: Because This Was Never About Charity

CDFIs were created as a corrective — a response to generations of redlining, divestment, and racialized economic exclusion.

They were — and still are — tools for economic justice.

And in today’s political climate, where rollbacks and budget cuts threaten the very institutions that now serve both urban and rural marginalized communities, that history matters more than ever.

Because the story of CDFIs isn’t just about what they do.
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It’s about why they had to exist in the first place.

And most importantly

‍Why — even today, 50 years later — we can’t afford to lose them.

Why CDFIs Matter Today — For Everyone

Let’s keep it 100.

Yes, CDFIs were created to serve Black communities — because we were the ones shut out of traditional finance, forced to hustle without a safety net.

‍Built like most social programs built with us in mind, once it started working, everybody else got in on it.

Now it serves everybody.
We're talking about:

• The 84% of (predominantly white) low-income loan clients
• The more than 50% of borrowers who identify as women
• The 1 in 5 loan clients from rural communities
• The more than 160,000 corporate jobs supported every year by this system
• The 100,000+ new small businesses that rely on CDFI dollars to open their doors every year.

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This may have started as a solution for one community — because we needed it most — but it has become a system that fuels all kinds of entrepreneurs: across race, religion, gender, identity, and geography.

What happens to everyone impacted by the CDFI system if these programs go away?

Black entrepreneurs may be the target — but we won’t be the only ones who get hurt.

Let that sink in.

‍Despite the size of the proposed cuts to CDFI funding — $261 million (or more than 80% of the current budget) — there’s been little mainstream media coverage, no major public debate, and very few public statements from elected officials outside advocacy circles. Compared to other federal budget conversations, this one has been tucked deep into the fine print.

But this isn’t a budget adjustment. It’s a backslide.

And the people who’ll pay the price aren’t sitting in boardrooms. They’re running childcare centers, barbershops, nonprofits, food trucks, tech startups, and corner stores.

What happens when we stop investing in the people who’ve been investing in their communities all along?

That’s the question this moment is forcing us to answer.

That’s why it’s so critical to understand what we stand to lose.
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Before CDFIs, most banks weren’t even tracking approval rates by race — and the truth is, most still aren’t.

That’s not an accident.
The system was built to ignore race so it didn’t have to deal with the truth.

To this day, most private banks and fintech lenders don’t have to report who’s being denied based on race, income, or zip code. And because no one’s watching, discrimination keeps happening — unchecked and unrecorded.

Meanwhile, CDFIs do the exact opposite.
They track the data.
They face the disparities.
And they build systems rooted in equity and accountability — not avoidance.

Because you can’t fix what you won’t measure.

And the little data we do have? It’s damning.
Even when income, credit, and debt levels are the same, Black and Brown borrowers still get worse loan terms — or no loans at all.
Women face higher denial rates.
White applicants with less income often get approved over Black applicants with more.

So when people ask, “Do we still need CDFIs?”
The answer is simple: Abso-forking-lutely.

They’re not a Band-Aid.
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They’re the light in a system built to stay in the dark.

The Political Landscape: What’s at Risk

Federal Support Is On the Line

CDFIs rely heavily on federal funding to operate programs that serve low-income and marginalized communities.

In 2025, the fund held steady at $324 million. That money is keeping programs going right now.

But soon? The ground is shifting.

In March 2025, Trump signed Executive Order 14238 — telling the Treasury to shut the CDFI Fund down “to the maximum extent allowed by law.”

And that same month, his budget for FY2026 called for a 90% cut — dropping support from $324 million to just $33 million.

This isn’t just a budget tweak.
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This is a calculated move to take the whole thing apart.

So what happens now?

The House starts working on their version of the 2026 budget on June 23 — with a vote planned for June 26. The Senate will follow after that. Then they’ll go back and forth to agree on final numbers.

Last year? The Senate pushed for $354 million. The House offered $276.6 million. Both ignored the White House cuts. So yeah — there’s reason to hope.

But hope without pressure? Won’t get us far.

Budgets are moral documents. If this one passes quietly, without a fight, the communities that need this the most — ours — will pay the price.

So here’s the takeaway:

The White House can suggest numbers — but they don’t get the final say. And even in all this political chaos, there are people on both sides who still know how much this fund matters.

But they need your help

They need to hear from folks who’ve been told “no” at a traditional bank. From people who know what a CDFI loan, a grant, or even just a phone call of encouragement can do.

The Scary Part? They Could Still Gut It From the Inside

Even if Congress approves the money, the executive branch still runs the show. And they can stall, sabotage, or slow-walk the distribution:

• Delay fund releases

• Block grant processing

• Reassign critical staff

• Undermine operations from within

It’s like getting a paycheck and having your bank account frozen. The money’s there — you just can’t reach it.

‍What This Means for You (and What You Can Do)

If you’ve made it this far, you already know what’s at stake.

Now here’s how you can show up:

1. Take Action to Protect CDFI Funding

The Opportunity Finance Network (OFN) is urging Congress to fully fund the CDFI Fund at $324 million for Fiscal Year 2026. This funding is crucial to ensure that CDFIs can continue to provide essential financial services to underserved communities across the nation.

Takes just a minute to make your voice heard — but the impact could last for generations.

2. Contact Your Senators and Representatives

Whether you’re in Michigan or another state, your elected officials need to hear that CDFIs matter — to you, to your neighborhood, to your business.

Here’s what to say: “I strongly support full federal funding for the CDFI Fund. Small businesses in my community rely on it, and gutting it would be devastating. Please fund it at $354 million and protect it from executive cuts.”

3. Spread the Word

Help make sure this doesn’t fly under the radar:

- Post the petition link on your socials

- Text it to a few people who care

- Drop it in your entrepreneur group chats

- Share it with any small business owner who wouldn’t be where they are today without a little help along the way

We’ve come too far to let silence kill our progress.

Let’s show them how loud we can be when the funding that built us is under attack.

The Bottom Line.

We didn’t come this far to be erased.

CDFIs aren’t just funding tools — they are proof that our communities were never the problem. The problem was always access. And when we finally started getting it, we didn’t waste it. We built something real.

In Detroit, we turned boarded-up blocks into business corridors. We gave returning citizens like Darryl a path to ownership. We didn’t just survive. We bloomed.

And now they want to cut the very thing that made that possible — not because it failed, but because it worked too well.

So let’s be clear: if they dismantle the CDFI Fund, it’s not just dollars we’re losing. It’s momentum. It’s visibility. It’s a lifeline that’s already too short for too many.

But we still have time. We still have each other. And we still have a voice.

Let’s use it.

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