Center for Entrepreneurial Opportunity Opposes the Executive Order Targeting MBDA and CDFIs

WASHINGTON, DC—The Center for Entrepreneurial Opportunity (CEO) opposes the Administration’s recent Executive Order mandating cuts to the Community Development Financial Institutions (CDFI) Fund and the Minority Business Development Agency (MBDA). 

For decades, CDFIs have empowered entrepreneurs shut out of traditional financing and transformed abandoned storefronts into thriving businesses. When entrepreneurs struggle with financing, CDFIs fill the gap with tailored capital, specialized financial services, and development expertise. Slashing the CDFI Fund will deprive small businesses of the capital they need to grow and succeed—leading to lower economic growth and less opportunity to scale businesses.

The President’s Executive Order contradicts prior support for CDFIs during his first term, when he signed legislation providing the largest-ever investment in CDFIs and Minority Depository Institutions, including a historic $12 billion in pandemic relief. The 2020 law directed emergency aid to the CDFI Fund for expanded lending, grants, and investments in low- and moderate-income minority communities. This has been a smart investment, with every $1 of federal support through the CDFI Fund leveraging $12 in private funding. 

“This Administration’s relentless efforts to dismantle essential programs now threaten the CDFI Fund and MBDA, putting key lifelines for underserved local communities at risk,” said Imani Augustus, Director of CEO. "Reducing these agencies to their bare bones will mean less economic growth as small businesses are left behind. Instead of retreating, we should strengthen the programs and services that make accessing capital and markets easier for business owners. The CDFI Fund and MBDA ensure entrepreneurs from all backgrounds can contribute to America’s prosperity. Now more than ever, we must focus on expanding opportunities for entrepreneurship.” 

As the only federal agency specifically mandated to foster minority business growth, MBDA provides targeted capital access programs, technical assistance, and crucial market connections. Minority business owners face higher loan rejection rates, smaller investments, and limited access to contracting opportunities. MBDA exists to address these systemic barriers and level the playing field. Cutting MBDA would endanger billions in economic output from minority-owned businesses, raise unemployment, and widen racial wealth gaps while failing to eliminate government redundancies.

CEO is a joint venture between the National Urban League and the think tank Third Way aimed at dramatically increasing the opportunity for all disadvantaged entrepreneurs to start and expand successful businesses.