Community lenders are asking a federal judge to stop the Trump administration from allowing $289 million approved by Congress to expire without reaching the institutions it was intended to fund.
The Freedom Economy Business Association sued the Treasury Department in Washington, D.C., arguing that the administration has failed to complete the distribution of fiscal 2025 grants for Community Development Financial Institutions, commonly known as CDFIs.
“This is all because the federal government has refused to follow the law and meet their obligations under the law,” Freedom Economy chair Tynesia Boyea-Robinson said.
CDFIs provide financing for small businesses, affordable housing, health clinics, and other projects that may have difficulty obtaining conventional loans. Most of the institutions do not accept deposits and rely on grants and private investment to make loans.
“Many of our members are unable to serve the millions of people relying on them,” Boyea-Robinson said at a press conference announcing the lawsuit. Defendants in the suit include Treasury Secretary Scott Bessent.
The Treasury Department announced the grant awards on September 15 but did not identify the recipients or obligate the funds, Freedom Economy says, according to Reuters. The group argues that announcing the awards is not enough. Unless Treasury commits the money by September 30, it says, the funding will expire.
The association is seeking a temporary restraining order to prevent Treasury from “running out the clock,” according to lead counsel Alphonso David, who is also CEO of the Global Black Economic Forum.
“The government should not be permitted to run out the clock on Congress’s will or impose unauthorized conditions on these funds,” David said.
The lawsuit also asks the court to require Treasury and the Office of Management and Budget to proceed with another $289 million Congress appropriated for the CDFI Fund for fiscal 2026.
Freedom Economy says the delay has already caused one community lender to close. Other CDFIs have laid off employees, reduced operations, and taken on debt while waiting for the money, according to Boyea-Robinson.
The Trump administration previously accused CDFIs of promoting a “partisan agenda,” “gender extremism,” and “climate radicalism.” The lenders deny those claims and say their work is based on the financing needs of the communities they serve.
