Treasury Announces CDFI Fund Reforms Targeting Eligibility and Anti-Discrimination Compliance
Summary
Treasury announced that the CDFI Fund will issue a forthcoming NPRM to clarify treatment of CDFI Fund awards under PRWORA, making certain non-qualified aliens ineligible for these benefits. Additionally, new provisions will require certified CDFIs to comply with federal anti-discrimination laws, adopt compliance policies, certify annually, and face potential decertification or fund recapture for noncompliance.
What changed
Treasury announced two reform areas for the CDFI Fund. First, a forthcoming NPRM will clarify that certain CDFI Fund awards constitute "federal public benefits" under PRWORA, making non-qualified aliens ineligible. Second, a new provision will require certified CDFIs to avoid practices violating federal anti-discrimination laws, including employment or financial preferences based on race, ethnicity, or sex inconsistent with federal law.
Affected CDFIs must adopt, implement, and maintain compliance policies and procedures, certify annually as to their existence and administration, and make them available for review upon request. Noncompliance remedies include vigorous exercise of CDFI Fund remedies: decertification of CDFI status, termination of unused funds, and recapture of past awards.
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Apr 17, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 17, 2026
Treasury announces CDFI Fund reforms targeting eligibility and anti-discrimination compliance
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On April 9, Treasury announced that the CDFI Fund will issue rules concerning the treatment of CDFI Fund awards under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). Treasury stated it will issue a forthcoming NPRM to clarify that certain benefits are “federal public benefits” within the meaning of PRWORA, which would make “illegal aliens and other non-qualified aliens” ineligible to receive these taxpayer-funded benefits. Treasury also announced reforms to ensure certified CDFIs comply with federal anti-discrimination laws.
A new provision will be added to relevant CDFI Fund agreements requiring that certified CDFIs do not engage in practices violating federal anti-discrimination laws, “including providing employment or financial preferences or set-asides based on race, ethnicity or sex in a manner inconsistent with federal laws.” Certified CDFIs will be required to adopt, implement and maintain compliance policies and procedures, certify annually as to their existence and administration, and make them available for review upon request by the CDFI Fund. In the event of noncompliance, the CDFI Fund will “vigorously exercise its remedies,” which may include decertification of CDFI status, termination of unused funds, and recapture of past awards.
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