President Trump said in a memorandum that federal funding reviews revealed taxpayer funds are being spent on grants with political overtones, and he directed the Attorney General to investigate this.
"Taxpayer funds are being spent on grants with highly political overtones," said Donald J. Trump, 45th and 47th U.S. President, according to The White House. "Possible use of Federal grants as slush funds for political and legislative advocacy raises serious legal concerns. Investigate whether Federal grant funds are being used to illegally support lobbying activities. Nothing in this memorandum shall be construed to impair or otherwise affect … the authority granted by law to an executive department or agency."
In March 2025, President Trump issued an executive order mandating that the Community Development Financial Institutions Fund (CDFI Fund) only perform functions that are "statutorily required and to the minimum extent permitted by law." According to the American Credit Union Association, this order reflects a broader administrative effort to rein in federal grant programs perceived to be advancing political or ideological agendas, particularly those related to diversity, equity, inclusion (DEI), and climate change. The CDFI Fund, which supports community lenders in underserved areas, became a central focus of these restrictions.
According to Politico, the Treasury Department under the Trump administration has proposed requiring applicants for Community Development Financial Institutions Fund awards to file a supplemental application disclosing any intended use of funds for DEI or climate-related initiatives. This move is part of a broader administrative policy shift to deny federal funds that do not "align" with the president’s priorities. The proposal, if approved by the Office of Management and Budget (OMB), would restrict funding eligibility for institutions engaged in such efforts.
OMB has withheld approximately $290 million in congressionally approved CDFI Fund money, a decision that has generated bipartisan concern. While the Treasury was informed by OMB that the funds would be released by August 31, 2025, the money remained unreleased as of early September. Lawmakers across party lines, particularly those representing rural and underserved regions, have voiced frustration over the delay and uncertainty surrounding the release of the funds.
The Trump administration has repeatedly proposed eliminating the CDFI Fund, including in its FY2025 budget, replacing it with a smaller $100 million rural-focused alternative. In contrast, House Republicans allocated $276.6 million to the program in their FY2026 appropriations bill—directly opposing the White House’s position. Meanwhile, according to Politico, a bipartisan group in the Senate is working to protect CDFI funding by embedding support for the program into critical legislation such as the annual defense bill.
Trump was born in 1946 in Queens, New York. He is recognized as both the 45th and 47th U.S. president and is noted for being the only president to serve non-consecutive terms in modern history. He was first elected in 2016 and returned to office in 2024 after defeating Vice President Kamala Harris.
