Washington
Washington Weekly: CFPB’s Future and the Impact of CDFI Cuts on Credit Unions | PYMNTS.com
By the standards set previously in Q1, this Monday wasn’t as manic as most. In fact there’s an element of “business as usual” in this installment of the Washington Weekly as CFPB workers were called back to work. But the general atmosphere of business uncertainty continues to hang over the nation’s capital as well as the companies following the Trump administration’s continuing navigation of trade finance and domestic financial regulations.
The top story for Karen Webster and QED Investors partner Amias Gerety was the continuing drama around the Consumer Financial Protection Bureau (CFPB). As The New York Times (NYT) reported Saturday (March 15), last week, the watchdog’s consumer response team was summoned back to the office to deal with a backlog of 16,000 complaints. In addition, the report said, the CFPB’s Fair Lending Office is back to preparing its annual report to Congress. And the front page of the agency’s website, which showed a “404 error” message beginning on the day Trump officials arrived at the bureau, is functioning once more.
The question now: What’s next for the CFPB? Gerety, a former assistant secretary of the treasury under Obama, believes the developments of the past week are good for the American consumer and a sign that the administration is taking its responsibilities to keep the agency operating seriously. While there’s a “wait and see” element to Gerety’s view of the CFPB, Webster noted that there’s a lot more hanging in the balance for the agency than just dealing with consumer complaints.
Gerety emphasized ambiguity remains about broader rulemaking and enforcement until a new director is confirmed by the Senate. The incoming leadership could swiftly alter or delay previously enacted regulations, given the Supreme Court’s directive that the agency follow rigorous rulemaking procedures. Gerety offered pragmatic advice to FinTech companies navigating this ambiguity, stressing the importance of maintaining robust compliance standards despite potential regulatory shifts.
“Even as the compliance obligations may be lessened, that actually puts more pressure on you to be operating in good faith relative to your consumers,” Gerety said. “We’re telling people it’s a little bit easier on compliance, but harder on risk.” Until the CFPB’s direction becomes clear, Gerety advises caution, noting, “You can’t follow the policy prescriptions. You have to follow the rules, because that’s the part that has legal force.”
He noted that the confirmation of CFPB director nominee Jonathan McKernan, expected imminently, is likely to be a smooth process and could rapidly clarify the agency’s path forward. “I expect his confirmation to go smoothly,” Gerety said. “He said the right things about following the law,” emphasizing that swift confirmation would help stabilize the agency and resolve uncertainty around pending regulations.
Big Hit to Credit Unions
While the CFPB may have a reprieve, the same cannot be said about the Community Development Financial Institutions (CDFI) Fund. It was the target of a new executive order from President Trump last week. Established in 1994 as a bipartisan Treasury Department initiative, the fund promotes economic opportunity in underserved communities by supporting mission-driven financial institutions that provide capital and services to individuals and businesses often overlooked by traditional banks. Prior to the recent executive order, the Fund had awarded over $5.1 billion through various monetary award programs and $66 billion in tax credits through its New Markets Tax Credit Program, helping finance over 109,000 businesses and 45,000 affordable housing units in fiscal year 2024. On Friday (March 14), the president signed an executive order directing the CDFI Fund to be “eliminated to the maximum extent consistent with applicable law” and to “reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law,” deeming it “unnecessary” alongside six other federal agencies, despite bipartisan congressional support for the program.
As Webster and Gerety discussed, the EO has implications beyond the federal grant program. It has substantial implications for credit unions across the United States. As of January 2025, 495 certified CDFI credit unions serve millions of members in economically distressed areas, and these institutions now face considerable uncertainty regarding funding streams and operational support, according to the fund’s website.
Gerety expressed concern about the recent executive order targeting the CDFI Fund, emphasizing its crucial role in aiding credit unions and community-focused financial institutions nationwide. He explained that nearly 10% of U.S. credit unions hold CDFI certification, leveraging the fund’s grants, subsidies, and affordable housing loans to effectively serve low-income and minority communities.
Gerety described the CDFI Fund as a straightforward, transparent mechanism whose impacts are easily measured, stressing, “It’s super transparent. It’s really easy to track the impact. And we’ve seen the impact now over 30 years transform communities.” He detailed how the fund consistently distributes loans and grants directly to community-oriented financial institutions, driving tangible outcomes. In 2024 alone, CDFI-backed institutions provided funding to 109,000 small businesses and supported the development of approximately 45,000 affordable housing units through $24 billion in community-focused loans and investments, according to Gerety.
The Uncertain Vibe
So it was a Monday in D.C. to be sure. Has it changed the general vibe in Washington? For consumers? Has it changed the general vibe for fintechs and banks? Let’s take the last issue first. Maybe the actions in Washington haven’t directly impacted FinTechs this week. But Klarna’s IPO filing last Friday (March 14) has had a positive effect, Gerety said. (Full disclosure: Gerety’s company, QED Investors was an early stage investor in Klarna but is no longer actively involved.)
“This is great news for FinTech,” he told Webster. “And I think the other thing that’s really interesting with Klarna is they have shifted the mindset in Europe for their customers. Not just to be a way for people to pay, but also a way for people to discover. And I think that that change in consumer behavior is a real testament to the team there. It’s interesting timing given the market term turmoil, but strong businesses that want to be public can survive turmoil in the market.”
And regarding the general vibe in Washington this week? Still uncertain, according to Gerety.
“Maybe you’re in a business where you manufacture with steel. Well, are the tariffs on or off? When are they coming? Should you build a plant here or somewhere else? You don’t know,” he said. “And when you put all that together the right thing to do is just to pause. And unfortunately for the economy, a pause is deadly.”
Washington
Suspect in deadly shooting of National Guard troops pleads not guilty to new charges
A man accused of shooting two National Guard troops near the White House, killing one of them, pleaded not guilty on Tuesday to charges in a new indictment that make him eligible for a possible death sentence if he is convicted.
Rahmanullah Lakanwal, an Afghan national, was arraigned on 17 counts, including first-degree murder, in the new indictment handed up by a federal grand jury in Washington. Lakanwal originally pleaded not guilty in January to nine charges in the November 2025 shooting that killed Spc. Sarah Beckstrom and critically wounded Staff Sgt. Andrew Wolfe.
Before the Justice Department announces whether it will seek the death penalty against Lakanwal, his defense attorneys can meet with prosecutors and present any evidence that they believe weighs against a death sentence.
Beckstrom, 20, and Wolfe, 24, were deployed with the West Virginia National Guard for the federal law-enforcement surge that began in August in Washington, D.C., at the direction of President Donald Trump.
Lakanwal is accused of driving to the nation’s capital from Bellingham, Washington, while in possession of a stolen firearm and ambushing the two Guard members outside a subway station three blocks from the White House.
Another National Guard member heard gunshots and saw Beckstrom and Wolfe fall to the ground as Lakanwal fired a gun and screamed, “Allahu Akbar!” according to a police report.
Lakanwal, who was shot during the confrontation, was seated in a wheelchair during his arraignment on Tuesday. He didn’t speak during the hearing; one of his attorneys entered a not guilty plea on his behalf.
Lakanwal entered the U.S. in 2021 through a Biden administration program that evacuated and resettled tens of thousands of Afghans after the U.S. withdrawal from the country. Lakanwal worked with the American government, including the CIA, “as a member of a partner force” in Kandahar, Afghanistan, CIA Director John Ratcliffe has said.
Lakanwal is due back in court Sept. 16. A trial date for his case hasn’t been scheduled yet.
Washington
Washington mayoral candidates outline how they would stand up to Trump
There’s a transplant from Mar-a-Lago at the center of DCs mayoral primary race on Tuesday, but his name is nowhere on the ballot.
For the first time in more than a decade, Washington DC will have a new mayor this year as the city faces concerns about how to address public safety, housing affordability, and increased federal immigration enforcement in the district. How the next mayor handles Donald Trump is also key question on residents’ minds, with many closely watching to see if any of the president’s supporters are pouring money into the race, as well as the primaries for the city’s congressional delegate.
Two frontrunners, DC councilmember Janeese Lewis George and former councilmember Kenyan McDuffie, both Democrats, are vying to succeed Mayor Muriel Bowser, who led the city during both of Trump’s terms in office. In a Democratic stronghold, whoever wins the primary is likely to win the election in November.
Lewis George, a democratic socialist and two-term city councilmember, has been campaigning on what she calls a “people-first platform”, promising to lower childcare costs and utility bills, stabilize rent for tenants, and prioritize downpayment assistance for homebuyers.
McDuffie, a former at-large city councilmember and former prosecutor, has garnered support from much of Washington’s business community, including restaurants and realtors, while promising to expand affordable housing, improve public safety, and diversify the local economy.
Trump weighed in a week before the election – threatening DC home rule, which allows district residents to elect their own mayor and council, if Lewis George wins the mayoral primary. “I wouldn’t like it. Maybe we take back Washington and run it on the federal basis. We won’t put up with it,” he said.
Meanwhile, Bowser, who has had her own trying journey with the administration, expressed her support for McDuffie, but stopped short of a full endorsement. “I have always supported Kenyan McDuffie … [but] I’m not endorsing or making any endorsements for mayor because I’m stepping off the political stage,” said Bowser during an Axios event on 10 June.
During interviews with the Guardian, both leading candidates outlined how they would stand up to the current administration.
Lewis George said she plans to build relationships with members of Congress while also looking for areas of compromise with the Trump administration.
“My approach to Donald Trump is one where I set a line that there is going to have to be [that] DC autonomy and DC statehood are non-negotiables, our immigrant community and neighbors, our Black youth are non-negotiables,” said Lewis George. “But if there are things you want to work with together, I’m happy to do that … I look at Union Station as an opportunity to build and create a regional transit hub and create jobs for our city.”
If elected, McDuffie said he would be a “fighter” for Washingtonians, working with the attorney general to preserve DC home rule.
“Washington DC residents deserve leaders who will never back down from Congress or the White House when they attempt to undermine our autonomy, and I have consistently opposed federal interference in DC’s local affairs and fought to protect our rights to govern ourselves,” he said. “We know as local officials what’s best for local Washington DC, and we are really working hard to make sure that we can protect our home rule.”
In response to increased federal immigration activity in the city, Lewis George said she would rescind former chief of police Pamela Smith’s executive order, which directs Metropolitan Police Department officers to cooperate with federal immigration enforcement for individuals not in police custody.
“Our officers need to be focused on getting guns off our streets and solving crimes. It is not their jobs to be alongside or babysitting or transporting federal immigration officers across the city to wreak havoc on our communities in our neighborhoods,” she said.
McDuffie offered a different approach.
“On day one, I’m going to appoint a police chief and a chancellor of our school system, and to make sure that we have an interagency coordinated effort to tackle the biggest challenge facing Washington DC residents right now, which is affordability,” said McDuffie.
Throughout this election, Democratic candidates have pushed to distance themselves from Trump while attempting to connect him and Republicans to their opponents, and ramped up attacks on each others campaigns.
In a recent televised debate on NBC4 Washington, Lewis George accused McDuffie of accepting “tens of thousands of dollars from Trump’s supporters”, though it was actually a relatively small number of donors who have given to both Trump and McDuffie.
“My principal opponent has been running a disinformation campaign that rivals Trump in spreading rumors and innuendo about donors to my campaign,” McDuffie said. “The reality is I have largely 99.9% of my donations have come from Democrats and independents who agree that I am best qualified to lead Washington DC and make our city safer and more affordable.”
Days before the election, the DC Office of Campaign Finance fined Lewis George $16,000 after it investigated her campaign for improperly coordinating with unions that also manage an independent political action committee.
The campaign said it will appeal the order, calling it a “reckless order … riddled with factual errors”. Lewis George’s team also raised concerns about the process. “Filing an order without legal merit just before an election follows a disturbing pattern of OCF’s conduct,” said the campaign in a written statement.
“I want [voters] to see through the political attacks and this political strategy to try to muddy the waters. It is clear that there is a candidate in this race who is accepting Trump donor dollars, big Trump donor dollars, and that is my opponent, Mr McDuffie, who has accepted those dollars and refused to return them,” said Lewis George before the OCF decision.
Conservative dollars have also appeared in the race to replace Eleanor Holmes Norton, the city’s non-voting House delegate for Congress. Five Democratic candidates are running to succeed Norton, and one of the more well-known candidates, Brooke Pinto, also a city councilmember, has reportedly received nearly $170,000 from donors who have also contributed to Trump and other Republican candidates in the past.
In a social media video response, Pinto said five of her donors out of nearly 2,000 have previously donated to Trump, adding that her opponent, Robert White, also has donors who have given to the president.
“The difference, though, is that I understand what it means to build a broad tent coalition. I have support from Democratic socialists, and Democrats, and independents, and yes, even Republicans,” said Pinto in the video. “It’s time that we have someone in this seat who can work with a broad set of stakeholders to make sure that those values are carried out.”
Currently, Lewis George has an 11-point lead over McDuffie, according to a new poll released by the Washington Post and George Mason University’s Schar School of Policy and Government. After the top frontrunners, these candidates are also on the ballot for DC mayor: Rini Sampath, Vincent Orange, Gary Goodweather, Ernest Johnson and Hope Solomon.
The 16 June primary also marks the first election using ranked choice voting in Washington DC.
This story was done in collaboration with URL Media
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