What role do CDFIs play in our communities, our world, and our portfolios

As a person of faith and a long-time community development practitioner, I recognize that our nation is at a critical juncture. Economic opportunity—particularly for those who have been historically marginalized—faces significant and increasing challenges. Despite these obstacles, I remain hopeful, as I have seen firsthand the positive impact that Community Development Financial Institutions (CDFIs) can have. CDFIs play a vital role in providing hope, stability, and access to opportunity for underserved communities.

It is more important than ever to support and expand the work of the CDFI Fund and other mission-driven lenders that advance economic opportunity in these areas. The CDFI Fund, which is at the heart of these efforts, now faces unprecedented legal and policy challenges as a federal program dedicated to increasing economic access in historically underserved neighborhoods is threatened. For those of us in this field, these challenges are not just news headlines—they have real and immediate implications. The question we must consider is: If the CDFI Fund is eliminated, what would become of the communities and individuals who rely on its support?

A Calling Rooted in Faith and Service

For decades, faith-based investors have led the way in socially responsible investing, seeing their financial resources as tools to uplift the marginalized and empower the poor. This tradition is deeply biblical: “Love your neighbor as yourself” (Matthew 22:39) is not just a call to charity, but to justice and stewardship. CDFIs put this calling into action by providing fair, accessible financing to those whom mainstream banks too often overlook—small business owners, first-time homebuyers, and community organizations in underserved areas. This is why many faith-based organizations have long been at the forefront of community investing, from the Adrian Dominican Sisters to the United Methodist Church’s investment board

Stories of Transformation

Early in my career as a CDFI lender, I worked with passionate entrepreneurs—many of them women, immigrants, and people of color—who had vision and grit but often lacked access to capital. We didn’t just make loans; we walked alongside our clients, offering business-building workshops, credit counseling, and connections to local partners. We saw businesses not only survive but thrive—creating jobs and stability for families and neighborhoods and strengthening our society and national economy.

One CDFI example I’ll highlight is Ascendus, which during the pandemic, stepped up as economic first responders, providing flexible capital and support to small businesses struggling to keep their doors open. Nearly 94% of Ascendus-supported businesses remained in operation, even as the world changed overnight. These stories are not isolated—they are echoed in communities across the country.

Why CDFIs—and the CDFI Fund—Matter Now

Today, CDFIs represent only about 1% of the banking sector, yet their impact is outsized. They fill a crucial gap, offering hope and opportunity where traditional finance falls short. The CDFI Fund’s support has enabled the financing of over 109,000 businesses and the creation of tens of thousands of affordable housing units in a single year. These are tangible expressions of faith in action—investments in people, families, and futures.

Importantly, CDFIs aren’t necessarily less efficient or more risky than mainstream financing systems; research shows CDFIs are just as stable, even while serving communities often perceived as “too risky” by traditional financing institutions. Their mission-driven focus balances financial stewardship with a commitment to justice and inclusion.

The Road Ahead: Hope, Opportunity, and the Enduring Impact of CDFIs

As we look to the future, the need for CDFIs has never been more urgent. Economic uncertainty, rising interest rates, and persistent inequality are pushing more families and small businesses to seek support from mission-driven lenders. CDFIs stand ready to answer this call—not just as providers of capital, but as catalysts for lasting community transformation.

Credit unions and CDFIs play a vital role in shaping a more inclusive and resilient economy. Their leadership and innovation help chart the path forward for underserved communities in several key ways:

• Lending as a Driver of Change: In the days ahead, CDFIs must continue to lead with bold lending strategies, whether opening new branches in credit deserts or crafting products tailored to the unique needs of underserved communities. When lending leads, grants and additional resources will follow, amplifying our collective impact.
• Economic Empowerment at the Core: CDFIs are uniquely positioned to fuel job creation and business growth, especially in areas where traditional banks hesitate to invest. By focusing on the economic factors that matter most—business finance, employment, and wealth-building—CDFIs can help communities not just survive but thrive.
• Expertise in Risk-Based Lending: The landscape is changing, and so are the risks. CDFIs must become experts in risk-based lending, ensuring that they can serve even more people safely and sustainably, especially as the needs of their communities evolve.
• Serving the ALICE Population: The number of ALICE (Asset Limited, Income Constrained, Employed) households is rising rapidly. Over the next decade, these families will rely on CDFIs and credit unions more than ever for access to fair, affordable financial services and pathways to stability.
• Commitment to Broad Representation and Fair Access: CDFIs must continue to innovate and adapt, ensuring that both urban and rural low- and moderate-income communities receive the support they need to flourish.
• Innovation and Resilience: The growth of fintech, the expansion of financial coaching, and the push for homeownership and savings are all essential to the future of CDFIs. Even as some grant programs face uncertainty, the sector’s commitment to green lending and fighting predatory practices demonstrates its resilience and adaptability.

As people of faith, we are called to advocate for and support the CDFI Fund, helping to ensure that all people can build brighter futures. By standing with CDFIs, we put our values—service, compassion, and justice—into meaningful action, strengthening our communities for generations to come. This work transcends politics; it is an expression of our faith. Even small acts, as shown by faith-based investors before us, can make a profound difference and embody hope in the world.