WASHINGTON, DC – MARCH 07: U.S. Secretary of Treasury Scott Bessent and U.S. President Donald Trump look on during The White House Digital Assets Summit in the State Dining Room of the White House on March 07, 2025 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)
Freedom Economy says community lenders have received award notices but not the actual funds as a Sept. 30 deadline approaches.
Nearly $300 million is currently being held up by the Trump administration amid a legal battle over the release of congressionally approved funds to community development financial institutions (CDFIs), which provide critical capital for Black businesses.
In a lawsuit filed last week in the United States District Court for the District of Columbia, a coalition of justice and sustainability investors sought a temporary restraining order and a preliminary injunction against the Treasury Department and Community Development Financial Institution Fund after the agencies failed to distribute $289 million to community institutions before the funds fiscally expire on Sept. 30.
“The community funding that we’re fighting for here really goes to the heart of marginalized communities,” Alphonso David, the lead counsel for Freedom Economy Business Association, told theGrio after a court hearing on Monday.
Established in 1994, the Community Development Financial Institution Fund was established by Congress to promote economic revitalization in distressed communities throughout the United States. Many Black businesses over-index in capital received by CDFIs in their communities because traditional banks systematically reject minority enterprises at much higher rates, forcing them to rely on community-based or mission-driven lenders.
The lawsuit states that after a series of court filings in which the federal government claimed the funds in question have been obligated, plaintiffs remain concerned that no names of award recipients or information about the assistance agreements have been publicly disclosed, as has been done in years since 2019.
“Because we’re facing a deadline in two and a half days, we wanted to ensure that these funds would be obligated, and there was no instance in which the government could claim that these funds had lapsed,” explained David, who is president and CEO of The Global Black Economic Forum.
Source: Black businesses caught in limbo as lawsuit challenges Trump administration over $289M in funding
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