The proposed rule aligns with the Trump administration’s broader agenda to eliminate “discriminatory diversity, equity and inclusion practices” within the federal government, and the OCC justifies the removal of this language by asserting that it “implicates matters of social, political and economic significance not authorized by clear statutory authority.”  

These changes in the OCC’s regulatory guidance could undermine progress in reducing wealth disparities with significant consequences for NCRC members and the communities they serve. Financial institutions may respond by directing less capital to minority and women-owned entities that build affordable housing and provide credit to small businesses. The removal of clear nondiscrimination guidance may also weaken accountability and embolden predatory lenders to discriminate against certain borrowers. 

NCRC submitted a comment letter to the OCC opposing these proposed changes with the main points outlined below. 

The Impact of Public Welfare Investments  

OCC and Federal Reserve-chartered banks can invest up to 15% of their capital and surplus—essentially a bank’s financial cushion—towards public welfare. Known as public welfare investments (PWIs), banks can invest in community development activities, like expanding affordable housing access, providing support to small businesses or bolstering workforce training programs. However, banks must seek regulatory approval for their PWIs to exceed 15%. PWIs qualify for Community Reinvestment Act (CRA) credit since the bank’s investment would benefit low- to moderate-income communities. 

Regulators provide guidance to banks on how to effectively make PWIs, which includes a list of activities that qualify. The OCC’s proposal removes “minority and women-owned entities” from this list of identified examples, although the OCC would continue to permit investments in those entities. That change weakens the guidance’s emphasis on directing capital to communities and businesses that have historically been overlooked and underserved.  

The concern, therefore, is not that these investments would become ineligible. Rather, removing the explicit reference may discourage banks from pursuing them. In the current environment, some institutions may avoid investments specifically focused on minority- and women-owned entities out of concern that they could attract scrutiny under the administration’s broader campaign against diversity, equity and inclusion initiatives. 

The Removal of Nondiscrimination Requirements 

In the same proposed rule, the OCC intends to remove nondiscrimination requirements for Federal Savings Associations (FSAs).  The requirements prohibit discrimination based on race or other protected characteristics in lending. The OCC’s stated rationale for removal of these requirements is that they were excessive and duplicative of the existing Regulation B, which implements the Equal Credit Opportunity Act (ECOA). Regulation B protects loan applicants from credit discrimination.  

The OCC’s removal of the nondiscrimination language could send the wrong message to lenders that the nondiscrimination requirements do not need to be taken seriously. On top of that, the CFPB recently weakened Regulation B by eliminating disparate-impact liability. This means that it will be more difficult to challenge lending practices that appear facially neutral on paper but disproportionately harm or exclude a group of people that share a protected characteristic, like race or gender. The combined effect of these changes could open the door for more lending discrimination against borrowers of color, amplified by significantly reduced accountability and oversight.  

By removing explicit language concerning equity and nondiscrimination, the OCC would make its expectations less clear for federally chartered institutions. Eliminating these provisions suggests that fair treatment of historically underserved borrowers and businesses is no longer a central supervisory priority. The OCC grants charters to lenders, obligating them to responsibly serve and treat all communities fairly, including minority and women-owned entities. OCC’s proposed removal of equity and non-discrimination-focused language undermines its charters and the principle of public trust.   

Manan Shah is the Policy Advisor for NCRC’s Policy & Government Affairs team.

Photo credit: Monstera Production via Pexels.

Congress enacted Section 1071 of the Dodd-Frank Act to solve a basic market failure: the lack of consistent, transparent public data showing which small businesses get credit, on what terms and where gaps remain.  

In 2010, in enacting Section 1071 Congress directed financial institutions to submit small business lending data to the Consumer Financial Protection Bureau (CFPB). The goal was to facilitate the enforcement of fair lending laws and help communities, governments and creditors identify credit needs for small businesses, including those owned by women and persons of color. It also required the CFPB to issue rules and guidance to implement Section 1071.  

The reporting requirement has never been about reporting for its own sake. The heart of Section 1071 is about knowing who gets access to capital and having a national dataset that can guide enforcement, product design, public investment and advocacy. 

On May 1, 2026, the CFPB issued its final revised rule implementing Section 1071 of the Dodd-Frank Act, effectively gutting the 2023 version of the rule’s small business lending reporting requirements by reducing the number of lenders and small businesses covered by the rule. It also reduced the number of data points lenders are required to report. It took 13 years for the CFPB to issue Section 1071’s initial implementing regulation in 2023.  

Last year, the Trump administration-led CFPB proposed a drastic overhaul to the 2023 rule’s reporting requirements. The 2026 final rule reflects the proposal by: 

• Lowering the number of covered lenders by raising the coverage threshold from 100 to 1,000 originations and excluding Farm Credit System lenders from coverage;  

• Reducing the number of covered small businesses by lowering the gross annual revenue cap from $5 million to $1 million; 

• Excluding merchant cash advances, agricultural lending and credit transactions of $1,000 or less; 

• Reducing the required datapoints by eliminating required reporting on pricing details, number of workers, application method and other categories;  

• Modifying the demographic information collected to remove all data collected on disaggregated race, ethnicity and the LGBTQI+ status of business owners applying for credit; and 

• Extending the compliance date to January 2028. 

These changes drastically reduce the percentage of lenders who must report to the CFPB about their small business lending activities. For example, the percentage of banks required to report is now between 3.6%-3.8% when under the 2023 version of the rule, approximately one third of all banks were required to do so. That is a drop from 1,700-1,860 banks being required to report to only 167-176 banks, meaning that this change will result in a ten-fold reduction in the number of banks required to report. The 2026 rule similarly reduces the number of other lenders required to report as well. 

NCRC and its members have been working on small business data transparency for almost two decades. In 2019, Rise Economy, then known as the California Reinvestment Coalition, the National Association of Latino Community Asset Builders (NALCAB) and small business owners sued the CFPB to force the agency to issue the long-delayed rule. That litigation helped produce a court-enforceable deadline for the CFPB to finalize the rule. Now, the fight has shifted from forcing the agency to act to prevent the agency from weakening implementation.  

In July 2025, Rise Economy, along with NCRC, Main Street Alliance and Reshonda Young (an Iowa small business owner) sued the CFPB again in federal district court, arguing that the agency unlawfully abandoned its implementation of the congressionally mandated small business lending data rule. The lawsuit alleges Administrative Procedure Act violations and seeks to halt the administration’s actions by requiring enforcement of the lending transparency rule.  

The suit argues that when Congress tells an agency to collect and publish data to detect discrimination and identify community development needs, the agency should not be able to nullify that Congressional mandate through delay, non-enforcement or by creating a rule so useless that it undermines the statute’s purpose. 

Financial institutions often argue that reporting will be costly, could discourage small business lending and that demographic data collection creates privacy or reputational risks. However, those concerns are not arguments for keeping the public in the dark. Since 1975, the Home Mortgage Disclosure Act (HMDA) has required financial institutions to maintain, report and publicly disclose loan-level information about mortgages to help show whether lenders are serving the housing needs of communities.  

The long history of mortgage lenders complying with HMDA reporting requirements demonstrates that public loan-level data can coexist with a robust credit market. Section 1071 also addresses privacy concerns by containing privacy protections that allow the CFPB to modify or withhold data when disclosure risks are too high. The better policy response would be to gradually phase in the new compliance requirements, provide clearer guidance and better protect sensitive information, much of which was contained in the 2023 CFPB rule.  

Opponents of Section 1071 have been pursuing congressional carveouts and repeals. For example, if enacted, H.R. 976 would repeal the small business lending data collection requirements outright, while other bills would narrow who must report and what they must report on. The Small LENDER Act (H.R. 941) would sharply exempt all lenders making fewer than 2,500 small business loans, limit covered small businesses to those with $1 million or less in annual revenue and delete key datapoints from reporting requirements, such as pricing and denial reasons.  

Another example is the House-passed Farm Bill in April 2026 with language making the Farm Credit Administration the “sole and independent regulator.” The accompanying committee report also makes clear that the provision is intended to shield Farm Credit institutions from CFPB 1071 reporting requirements.  If passed into law, the exemption would make it harder for the public to know if capital is reaching agricultural businesses that are small, just starting out or underserved.  

After 16 years of advocacy, research, rulemaking and litigation, the progress behind Section 1071 is real, even if the work is unfinished. Advocates helped move small business lending data transparency from a statutory promise in 2010 to a national rule. Still, the CFPB’s 2026 rule has gutted the dataset needed for the public to identify discrimination, credit deserts and unmet capital demand.  

Advocates can help keep the debate grounded by documenting local small business credit barriers, educating lawmakers about how additional 1071 data would improve community development work and urging lawmakers to oppose changes to the statute that would further prevent the public from seeing which lenders are serving small businesses fairly and which communities are still being left out. 

Tara Flynn is the Policy Director with NCRC’s Policy & Government Affairs team.

Photo credit: Steph Quernemoen via Unsplash.

On April 16, more than 200 NCRC members capped off NCRC’s annual Just Economy Conference by participating in Hill Day. Our annual Hill Day brings together community development advocates from across the country to promote federal legislation that supports the work they are doing at the local level. For many NCRC members, that work includes helping a community member navigate barriers to homeownership, expanding credit access for a small business owner or mitigating the long-term effects of disinvestment and redlining. 

This year’s Hill Day began at the Capitol Visitor’s Center where attendees gathered for breakfast. Congresswoman Judy Chu of California’s 26th District gave brief remarks about broader affordability challenges and access to capital barriers for small business owners. Congresswoman Chu urged NCRC members to continue advocating for economic justice.  

NCRC members then dispersed to join their respective state delegations and attend meetings with their Congressional offices. Members participated in over 120 meetings, with some even meeting directly with their members of Congress. 

On Hill Day, NCRC members connected their local work to our broader federal policy priorities for 2026. These priorities reflect what members are already working through in their day-to-day roles by making the banking system work for low- and moderate-income communities, expanding access to affordable housing, supporting small business owners, and strengthening investment in community development financial institutions (CDFIs). Members grounded their discussions in shared bipartisan priorities like economic growth and access to opportunity. This will open the door for more substantive agreement on issues that affect all Americans. 

Some advocates may question whether legislative advocacy can have any impact in a polarized federal environment. However, NCRC’s Hill Day offered something just as important as policy wins. It offered our members and their representatives the opportunity to build relationships, find common ground and strengthen bipartisan understanding around community development issues. These conversations will shape how policymakers think about these issues moving forward and lay the groundwork for future change. 

“When we show up in DC, we are showing up for our community,” said Claudia Wilson, the executive director of the Community Development Network of Maryland. “NCRC Hill Day matters because federal representatives are counting! At the very least they are counting the number of people they hear from and the number of times they hear about an issue.” 

What makes these policy conversations truly memorable are the personal stories of NCRC members and their communities. There will always be statistical data to support our causes, but stories are what make policy issues feel real. When our members share first-hand accounts of what these issues look like on the ground, it becomes harder for policymakers across the political spectrum to ignore the people and communities they represent. Our members can point to real examples, real challenges and real outcomes. A strong story can stay with policymakers long after a meeting ends and influence how they think about an issue moving forward. 

Hill Day is much more than just a series of meetings with Congressional offices. It is part of a broader effort to make sure the people most affected by issues of economic inequality and financial access are part of the decision-making process. Their stories and perspectives matter, particularly in conversations where policy can feel abstract or removed from local realities. At the end of the day, policy is strongest when it reflects real experiences, and that is exactly what NCRC members brought with them to Hill Day. 

Caitlyn Kearney is an Intern with NCRC’s Policy & Government Affairs team.

Manan Shah is the Policy Advisor with NCRC’s Policy & Government Affairs team.

Lauren Wolters is the Government Affairs Specialist with NCRC’s Policy & Government Affairs team.

Photo caption: NCRC board chair Carol Johnson (center) and board member Matt Hull (center left) with the Texas delegation on Hill Day (photo credit: Maria Bryk).

This is an abrupt reversal from SBA’s original policy notice released this past December, which would have allowed small businesses that were 100% owned by legal permanent residents to access SBA financing products. Small businesses that have 5% of its ownership held by foreign nationals would also have been able to access these products.  

The revised policy comes amid broader national debates over immigration enforcement and its effects on communities and local economies. In some areas, concerns about Immigration and Customs Enforcement (ICE) have contributed to uncertainty for immigrant-owned businesses, leading some to fully or partially close their small businesses across the country.  

Taken together, the new SBA loan restrictions and the effects of ICE likely will create additional obstacles for immigrant entrepreneurs seeking to start, sustain or grow small businesses in their communities. 

SBA Loans as a Critical Lifeline for Immigrant Entrepreneurs 

Immigrant-owned small businesses play an important role in the national economy. They create jobs, generate local revenue and make downtown corridors vibrant with their cultural diversity. Immigrants are twice as likely than native-born, US citizens to start a small business. In fact, nearly 20% of all small businesses in the US are immigrant owned. There is a wide range of immigrant-owned small businesses with a variety of sizes and across multiple industries. Small businesses with majority immigrant ownership made an average of $100,000 to $1 million in revenue in 2024, which was mostly distributed across the accommodation, food and retail trade industries.  

“Many immigrants come to this country and turn to entrepreneurship as a way to financially support their families often because of language barriers or because their diplomas and professional certifications from their home countries are not recognized in the United States along with many other challenges,” said Daniella Djiogan, NCRC’s director of small business support services. 

Immigrant entrepreneurs are also more likely to face barriers to capital access after arriving in the US. The SBA’s guaranteed loans — 7(a) loans, 504 loans and microloans — are attractive options for small business owners seeking lower interest rates and flexible terms. The 7a and 504 loan programs offer long-term financing for major fixed assets like land, buildings and equipment, while the microloan program offers up to $50,000 for repairs and enhancements.  

With SBA’s new citizenship requirements now in place, green card-holding immigrants can no longer access these programs. Furthermore, banks may be compelled to adopt more stringent ownership and citizenship verification procedures, which would not only delay processing times for all small business owners, but also increase administrative costs for lenders. Consequently, predatory lenders may be able to lure immigrant entrepreneurs into borrowing high-interest loans, subsequently trapping them in a debt cycle.  

“Access to capital through the SBA may have been one of the only viable pathways for them to start or grow their businesses,” Djiogan said. “That access does not just impact one business owner… It affects job creation, local spending and the greater economic stability within communities.”  

ICE’s Impact on Main Street Businesses  

Increased immigration enforcement activity has also affected small business operations in some communities across the country. Advocacy organization Small Business Majority conducted a poll that found that 47% of small business owners say increased immigration enforcement actions has had a negative impact on their business by way of less foot traffic, staff reductions and decreased revenue.   

“It’s businesses that employ green-card holders and immigrants that are being impacted because they fear going to work or coming out of their home,” said Amber Córdoba, co-chair of the Arizona Community Development Financial Institutions Network and NCRC member. “In some cases in Tucson, we have had two businesses close, [with] one business owner [selling] their business to their partner and mov[ing] out of the country.” 

In the long term, the impact of ICE and the SBA loan restrictions likely will deplete a source of income for immigrant entrepreneurs who meaningfully contribute to the economy, which could result in higher prices for goods and services in a time when Americans are burdened by affordability concerns.  

In Congress, Senator Ed Markey (D-MA), ranking member of the Senate Committee on Small Business & Entrepreneurship, introduced the Small Business ICE Disruption Fund Act. The bill would allow eligible small businesses affected by immigration enforcement actions to recover up to $1 million in lost revenue. Markey’s office, together with other lawmakers, also sent a letter to SBA Administrator Kelly Loeffler raising concerns about the SBA loan restrictions. The bill is unlikely to become law in the near future.   

Whether it’s the Dominican-owned bodega or the Ethiopian-owned cafe, the South Asian-owned corner grocery or the Vietnamese-owned nail salon, immigrant-owned small businesses are an important part of the nation’s economic and cultural landscape. Restrictions on SBA loans may reduce access to programs that support the growth and expansion of these businesses, with potential implications for economic activity nationwide. 

Manan Shah is the Policy Advisor with NCRC’s Policy & Government Affairs team.

Photo credit: Alex Boyd via Pexels.

The CRA requires regulators to evaluate all banks on how well they serve the credit needs of the communities they operate in. The HMDA requires that mortgage lenders disclose how they respond to loan applications on an annual basis. These landmark laws ensure fairness in our financial system by requiring lenders to demonstrate that their business operations foster equitable access to property ownership and the wealth it creates. However, neither the CRA nor the HMDA cover a prerequisite of any mortgage application – the ability to secure affordable property insurance.

Similar to mortgage lending, discrimination in property insurance is well documented. In 1979, civil rights advisory committees in several Midwestern states identified that insurance rates and marketing practices were “frequently arbitrary and unfairly discriminatory” and that “insurance unavailability threatens the viability of entire communities,” with communities of color disproportionately burdened.  

National People’s Action confirmed that insurance companies engaged in redlining practices when they published maps that the Kemper Corporation submitted to Illinois state regulators that pinpointed “restricted areas” in Chicago where Kemper would not originate insurance policies. More recently, the National Fair Housing Alliance found that Travelers Insurance denied coverage to rental properties if tenants received public housing assistance, a practice that discourages landlords from making rental housing available to all.  

The cost of property insurance is also rising. From 2021 to 2024, insurance premiums became more expensive in 95% of zip codes – with a third of zip codes reporting insurance costs increasing by more than 30%. Insurance companies are also dropping paying policyholders more frequently. 

Since lenders require insurance, the increasing unavailability of affordable insurance could result in “regions of the country where you can’t get a mortgage,” as Federal Reserve Chairman Powell testified to Congress last year. However, homeowners and buyers aren’t the only ones affected as the cost of insuring rental properties has skyrocketed to a 75% increase from 2019 to 2024. A recent study conducted by the State of New York found that affordable housing developers had “seen premiums rise, even in instances where there had been no previous claims made, to levels that they deemed prohibitively expensive.”

A major reason why insurance costs are accelerating is due to the increased frequency of destructive weather events. In 2024, there were 27 extreme weather events that each caused at least $1 billion in damages in the US, as well as over 550 deaths. During the  2022-2024 period, the US averaged 23 of these events per year – almost double the average number of these events in the 2010s – and over triple the average in the 2000s. Insured natural catastrophe losses in the US are at record levels, reaching $117 billion in 2024 and accounting for over three quarters of global insurance losses caused by extreme weather events. 

Insurance companies respond to these losses by raising premiums and refusing to renew or write new policies to reduce their financial exposure. Without insurance, homebuyers risk defaulting on loans and being unable to repair damage to their most valuable asset. One insurance executive has warned this could result in the “economic value of entire regions – coastal, arid, wildfire-prone –  vanish[ing] from financial ledgers” and that “markets will reprice, rapidly and brutally”.

Insurance companies themselves, particularly US insurance companies, are also contributing to climate change by continuing to invest in fossil fuel companies and projects. This creates a vicious cycle where insurance companies invest their customers’ premium payments into fossil fuel endeavors in order to have funds to settle claims. Those same investments then increase the likelihood of damages and insurance claims, with insurance companies subsequently raising premiums or withdrawing from communities altogether to minimize losses and maximize profits. 

If left unchecked, this cycle will push homeownership further out of reach and leave fewer opportunities for affordable rental housing. It’s also important to note that insurance companies are doing quite well as they raise rates and drop policies. Despite claims from insurance companies that the industry is struggling and must raise premiums as a result, the industry reported record profits in 2024 – nearly doubling their profits from 2023 and quadrupling earnings reported in 2022. 2025 is expected to be another banner year for the industry as well.

Luckily, the anti-redlining movement provides a blueprint for deconstructing access to wealth barriers created by rising insurance costs and unavailability. Extending the CRA to insurance companies would give regulators more tools to promote affordable insurance through the development of a public rating system for insurance companies and penalties for substandard performance. Regulators would be able to review the community impact of an insurance company’s investments, such as their participation in green bonds and their level of financing that helps underserved communities prevent and minimize damages after extreme weather events. 

Extending CRA to insurance companies would give consumers an opportunity to weigh in on the business practices of insurance companies, such as providing their experiences with the processing of claims or quality of coverage information. Furthermore, this will also make the CRA more effective at evaluating how financial institutions meet credit needs. Keeping insurance out of the CRA review process puts banks currently covered by CRA at a disadvantage as opportunities for lending and community development financing shrink due to insurance gaps and rising costs.

Regulators should also start annually collecting and disclosing more data on property insurance rates similar to what mortgage lenders have had to follow since 1975 thanks to HMDA. This should include reporting on premiums, deductibles, non-renewals and claim denials broken down by the race, ethnicity, gender and income of policyholders and the location of the insured property. Mortgage disclosures have been an essential tool for enforcing anti-discrimination laws and holding lenders accountable. 

Just like mortgage data, publicly available insurance information will give advocates the ability to back up lived experiences with hard facts that show how specific groups and neighborhoods are being treated differently. Policymakers should ignore claims that this isn’t feasible or will raise costs. Most of this information can be gathered by having customers and insurance companies complete simple forms. Implementation costs for insurance companies would be minimal compared to their revenue and are likely to decrease over time as software companies compete to offer compliance solutions.

NCRC has been working with our members and partners to put these policies in place. The McCarran-Ferguson Act of 1945 actually gives states the ability to license and regulate insurance companies in place of the federal government. New York State has already introduced the Insure Our Communities Act (IOC) that would extend their state’s CRA law to cover property insurance companies and require data disclosures. 

IOC would also require insurance companies in New York State to stop financing new fossil fuel projects and phase out existing fossil fuel investments within five years. These steps are needed because increases in affordability created through CRA and data disclosures will be short-lived unless we take action to reverse the root cause of the current insurance crisis – unsustainable climate change. NCRC is also a member of the Equitable & Just Insurance Initiative, whom we worked with to develop model data disclosure language that can be used in your state. 

The anti-redlining movement was able to achieve critical policy changes that continue to give advocates and regulators the ability to hold banks accountable for how they serve communities. We must now do the same for insurance companies. Or, to quote the “mother of CRA” Gale Cincotta when she spoke at the Insurance Redlining & Reinvestment Conference in Chicago in March of 1979:

“Adequate and affordable and available insurance is a right. It is not a privilege which depends upon your address, age of your dwelling, or your race… Insurance is a right we must now include when we speak of civil rights.”

Kevin Hill is the Senior Policy Advisor with NCRC’s Policy and Government Affairs team.

Photo credit: Vlad Deep via Pexels.

1. Financial Services and General Government 
2. State, Foreign Operations and Related Programs 
3. Defense 
4. Labor, Health, and Human Services, Education and Related Agencies 
5. Transportation, Housing and Urban Development and Related Agencies 

The sixth appropriations bill excluded from the package would have fully funded the Department of Homeland Security (DHS). Instead, Congress passed a Continuing Resolution (CR) to fund the DHS for 10 days until possible negotiations between Democrats and Republicans are made.  

Congress previously passed six appropriations bills, which were signed into law: Agriculture, Military Construction-VA, Legislative Branch, Commerce, Justice and Science, Energy and Water Development and the Interior and Environment. These bills will also fund their corresponding agencies until the end of the fiscal year.    

FY 26 Funding for Community Development Programs 

NCRC has created a FY 2026 Appropriations Chart that lists the final funding levels for community development programs that most impact our members’ work. Listed below are highlights of the final funding numbers for major agencies and programs: 

The CDFI Fund 

The CDFI Fund, an agency within the Treasury Department, will receive $324 million, which is the same amount it received in FY 2025. This will provide funding for CDFI programs like the Technical/Financial Assistance grants program ($135 million) and Native CDFI initiatives ($28 million).  

However, the remaining $298 million of the allotted FY 2025 funding has yet to be released by the Office of Management and Budget (OMB). Without the release of those funds, the CDFI Fund cannot disperse grant awards to CDFIs. CDFI Fund appropriations occur over a two-cycle period, with FY25 funding expiring this September, and FY26 funding expiring September 2027. 

Housing and Urban Development (HUD) 

The legislation will fund the Housing and Urban Development agency at $77.3 billion, which is a $7 million increase from FY 2025. This includes funding for major programs and grants, such as: 

• $38.439 billion for the Tenant-Based Rental Assistance program (Section 8), a $2.39 billion increase from FY ‘25. 

• $18.543 billion for the Project-Based Rental Assistance program, a $2.053 billion increase from FY ‘25. 

• $8.319 billion for the Public Housing Fund program, a slight decrease from FY ‘25. 

• $1.25 billion for the HOME Investment Partnerships program, level funding from FY ‘25. 

• $3.3 billion for the Community Development Block Grant program, level funding from FY ‘25. 

• $57 million for the Housing Counseling Assistance program, level funding from FY ‘25. 

• $56 million for the Fair Housing Initiatives program, level funding from FY ‘25. 

• $26 million for the Fair Housing Assistance program, level funding from FY ‘25. 

Small Business Administration: Entrepreneurial Development 

The entrepreneurial development programs of the Small Business Administration (SBA) will receive $330 million, funding programs such as the Microloan Technical Assistance program ($41 million), the Women’s Business Center ($27 million) and the Native American Outreach program ($5.3 million). These programs will assist underserved small business owners and organizations that support them via technical assistance and business education.  

Political Dynamics of DHS Funding 

Although the partial shutdown has ended, the CR that funds the DHS will expire on February 13. The recent raids and shootings by Immigration and Customs Enforcement (ICE), including the murders of Renee Good and Alex Pretti in Minneapolis, have sparked outrage among Congressional Democrats as many refuse to pass another CR to fund DHS.  

“An additional [continuing resolution], from our standpoint, is off the table,” House Minority Leader Hakeem Jeffries told reporters on Tuesday.  

On Thursday night, Senator Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries sent a letter to Republican leadership outlining 10 demands to “rein in ICE” by adding more guardrails. The demands for ICE agents include banning masks, requiring the use of body cameras and IDs and improving warrant procedures and standards. Many Republicans, including Speaker of the House Mike Johnson, have already voiced their opposition to these additional restrictions. 

DHS, which also houses the Transportation Security Administration (TSA), the Federal Emergency Management Agency (FEMA) and the Coast Guard, may operate for a longer period without another CR, as the One Big Beautiful Bill (OBBB) allocated $165 billion to the department. In addition, the passage of another CR could also mean that DHS will have significant leeway over how programs at the agency are managed.  

NCRC will continue to monitor the situation and support our members who serve immigrant communities across the nation.  

Manan Shah is the Policy Advisor with NCRC’s Policy & Government Affairs team.

Photo credit: Frank Kastle via Upsplash.

A single lapse in federal funding brought SNAP to the brink of severe payment delays, reduced benefits and a widespread administrative breakdown. It is a clear reminder that families, local economies and community organizations often shoulder the consequences when public systems are not designed to withstand political or fiscal shocks. The multiple vulnerabilities of SNAP that were unearthed during the shutdown show how urgently the program needs to be strengthened and reformed.

SNAP is a federal food assistance program that works to combat food insecurity, supports workforce stability and drives local economic activity. SNAP provides food assistance to more than 42 million people every month. It is structured as an entitlement program, meaning certain benefits are guaranteed to members of a specific group (e.g., lower-income individuals). 

Typically, states issue the SNAP benefits themselves and then receive reimbursement from the federal government. This reimbursement structure is designed to shield states (and ultimately households) from disruptions by ensuring they have predictable, reimbursable funding to issue monthly benefits. In theory, it acts as a safeguard: states so families aren’t directly exposed to federal budget delays, with the federal government later settling the balance. When functioning properly, this system creates a buffer that keeps benefits flowing on time, even when federal appropriations stall or political negotiations drag on. 

However, during the shutdown, the US Department of Agriculture (USDA) instructed states to pause the issuance of SNAP benefits for the month of November. USDA stated that they weren’t able to use their contingency funds to fill the funding gap either. In response, twenty-five states filed a lawsuit, with a federal judge ordering the Trump administration to resume payments by October 31. Even after this development, USDA announced that it would only be administering partial benefits because of allegedly limited funds, with questions about legal authority delaying the payment timeline even further.

For families navigating high food, housing and transportation costs, even the threat of a temporary pause in SNAP benefits shook household budgets. This shutdown demonstrated that SNAP’s program design does not fully protect beneficiaries from disruptions caused by political gridlock. A program that should operate as an economic stabilizer instead became another point of financial instability and political leverage. 

The shutdown revealed five key weaknesses with the current SNAP program structure:

1. Households can quickly become even more economically vulnerable. The shutdown created a real risk of food insecurity for millions of households. Many families would have been forced to stretch their groceries or redirect limited income away from rent, utilities or transportation. When families cannot rely on SNAP, they turn to food pantries, high-cost credit products or equally struggling loved ones to bridge the financial gap. These adjustments carry long-term financial consequences that remain even after benefits resume.
2. Local economies and small businesses suffer economically. SNAP dollars flow directly into grocery stores, farmers markets and small retailers. Research shows that every SNAP dollar generates economic activity in the local economy. When benefits are delayed, these businesses experience immediate revenue losses. The shutdown highlighted how much a community’s economic activity depends on consistent household food spending via SNAP benefits. Cashiers, stockers, delivery drivers and warehouse workers all feel the effects when the funds from SNAP beneficiaries slow down.
3. Workforce development agencies’ capacity is weakened. When households face food insecurity, daily work attendance drops, job retention weakens and participants struggle to focus on career training opportunities. Workforce development programs are subsequently forced to shift staff from focusing on providing job coaching and placement services to clients to resolving food-related crises, managing referrals and helping participants regain financial stability. Providers also experience higher program attrition rates, longer program timelines and greater wraparound service needs. Instability in SNAP ultimately forces workforce development systems to operate more like crisis-response programs than career advancement partners.
4. Community-based nonprofits can only fill so many gaps. When SNAP wavers, community-based organizations often fill the gaps, but many are already stretched thin. Shutdown-related disruptions forced food pantries, community action agencies and other local partners to prepare for increased demand without additional resources or clarity on the duration of the benefits disruption. For smaller and locally rooted organizations, these sudden surges are especially destabilizing. Their capacity to respond is limited and often depends on short-term fundraising or emergency donations.

Ultimately, the shutdown served as a warning. It exposed not only the immediate disruption to households but also the deeper structural weaknesses described above: SNAP’s current design leaves it vulnerable to political interpretation, lacks sustainable contingency funding, and offers states little federal guidance on how to maintain benefits during funding lapses. A program this essential cannot rely on last-minute legal decisions, temporary workarounds or fragile administrative assumptions. Families, frontline workers and local partners deserve a system that is modernized, resilient and predictable. State governments should be able to continue issuing benefits and sustaining operations even when federal uncertainty rises.

As we move forward, this experience should guide policymakers, advocates and administrators toward long-term reforms and investments that reinforce SNAP’s core purpose: ensuring every household can access consistent, dignified supplemental food assistance support no matter what the political climate may be.

Doug Mollett is the Economic Mobility Manager with NCRC’s Economic Mobility team.

Manan Shah is the Policy Advisor with NCRC’s Policy & Government Affairs team.

Photo credit: Mike Jones via Pexels.

As more and more digital currency companies are vying for financial legitimacy by becoming a national trust bank via the Office of the Comptroller of the Currency (OCC), a growing chorus of organizations are raising concerns about what will likely manifest into more financial issues for low- to moderate-income (LMI) Americans.

NCRC has recently formally opposed several national trust bank charter applications from stablecoin and cryptocurrency firms due to their often unregulated and exploitative operations and the larger implications on community development. Other financial institutions and financial reform organizations across the spectrum (from traditional banking institutions to consumer rights advocates to locally owned and operated community banks) have also sounded the alarm on the dangers this could pose to communities as well. 

What is a national trust bank charter?

A bank charter is a business license for an institution looking to provide bank-like services. Companies wanting to engage in banking activity may obtain a bank charter at either the state or federal level via a banking regulatory body. 

There are multiple different types of bank charters, some of which convey more regulatory accountability than others. The type that cryptocurrency firms are seeking – known as a national trust bank charter – comes with less stringent oversight and fewer public protections than a layperson might expect from something with the word “bank” in its name.

“National trust banks are not subject to the full set of regulations that are generally applicable to commercial banks,” the Congressional Research Service wrote in a 2022 analysis.

Stablecoin and cryptocurrency companies’ newfound interest  

Currently, cryptocurrency companies and other nonbank financial institutions have to utilize third party intermediaries to manage their investments, protect their assets and accomplish other fiduciary activities given that they don’t have the regulatory permissions to do so on their own. However, gaining national trust bank status would provide sought-after legitimacy as well as allow “[t]he players who voluntarily step into regulation, get the proper licenses and build the right structure… [to] be the ones institutional capital flocks to,” as crypto analyst Patrick Thompson puts it.

Congress gave the OCC the federal authority to grant national trust bank charters in the National Bank Act of 1863-64, with the understanding that the resulting trust companies would focus on fiduciary activities—such as acting as a trustee or executor—as well as asset custody. The law intentionally separated such activities from traditional banking functions like taking deposits or making loans. 

Two recent changes have resulted in a surge in national trust bank charter applications from stablecoin companies. First, a 2021 change in the OCC’s trust bank charter creation policy called Interpretive Letter #1176 provided an operational requirement loophole by taking the position that a national trust bank may engage in any permissible activities of a trust company, not just fiduciary duties. This includes non-fiduciary custody of assets, which is critical for stablecoin issuers and crypto custodians. 

Second, in July 2025, Congress passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which explicitly authorizes nonbank payment stablecoin issuers to operate under federal oversight and recognizes OCC-chartered trust banks as an eligible structure for compliance purposes. 

Previously, cryptocurrencies were considered securities that were regulated by the US Securities and Exchange Commission (SEC). By removing legal uncertainty around stablecoin issuance and expanding OCC authority to include these issuers, the GENIUS Act creates a pathway for crypto companies to apply for a national bank charter. However, as emphasized in recent comment letters submitted by NCRC, the Independent Community Bankers Association, the Bank Policy Institute and Americans for Financial Reform, it is questionable whether OCC has the authority to grant a national trust bank charter to stablecoin issuers: 

“Congressional intent, plain reading of the statute, and current regulations only grant the [OCC] authority to grant national trust bank charters to institutions that perform these narrow fiduciary activities and only these narrow fiduciary activities.” In contrast, crypto companies applying for the national trust bank charter propose to engage in activities that go beyond fiduciary activities, including processing payments and issuing private stablecoin currencies. 

The negative impacts on vulnerable communities

Multiple cryptocurrency companies that have filed for national trust bank charters, such as Circle, Coinbase, Ripple and Crypto.com have long track records of unethical business practices that should give the OCC serious pause in allowing them more freedom to operate in the financial services space. There are a whole host of consequences to the exploitation of the national trust bank charter model not only for national and global financial markets, but for communities already dealing with compounding financial pressures.

Lost reinvestment opportunities back into communities

National trust banks are not subject to the Community Reinvestment Act (CRA), meaning that they would gain the reputational and operational benefits of this new designation but shoulder none of the corresponding community development requirements to serve the credit needs of LMI communities. 

“Banks power the economy by turning deposits into loans,” wrote Weston Loyd, vice president, head of media relations and third party engagement with the Consumer Bankers Association (CBA). “Incentivizing a shift from bank deposits and money market funds to stablecoins would end up increasing lending costs and reducing loans to businesses and consumer households.”

As noted in multiple comment letters from NCRC, “This diversion of capital away from entities with a community reinvestment obligation represents a fundamental departure from the principle that federally chartered institutions should serve public purposes, not merely private profit.”

Since customers of stablecoin companies tend to keep those funds in that form instead of depositing them and these nonbanks aren’t required to keep deposits received within the US banking system, vital funding for community and economic development opportunities would be diverted from CRA-regulated traditional banking institutions.

“The [trust bank charter] applicants propose to engage in activities such as managing stablecoin reserves, facilitating payments and taking deposits. These activities closely mirror core banking functions,” according to the Bank Policy Institute (BPI).  “[Y]et the applicants would avoid obtaining deposit insurance, nor would they be subject to consolidated supervision and consumer protections and other safeguards required of full-service national banks and their parent companies.”

Will create more structural risks to financial systems

Given the volatile, unpredictable nature of digital assets, this regulatory grey zone that stablecoin companies seek to inhabit only leaves more room for risky behavior to the detriment of consumers and the larger financial system.

“Recent failures of major crypto-platforms demonstrate the risk of wholesale loss of customer assets absent deposit insurance and resolution mechanisms,” according to Michael Emancipator, senior vice president and regulatory counsel with Independent Community Bankers of America (ICBA). “A charter that legitimizes such activities without equivalent safeguards exacerbates systemic vulnerability for all participants in the financial system.”

These concerns have united traditional banking institutions in formally opposing the expansion of national trust banking charters to stablecoin firms. “If the Applicants are successfully able to establish themselves as national trust banks that do not primarily provide fiduciary services, but instead provide traditional banking services like payments,” a July 2025 joint comment letter to the OCC by America’s Credit Unions, ICBA, CBA, the National Bankers Association and the American Bankers Association said, “then… other companies will follow, presenting material risk to the U.S. banking and financial system.”

No obligation to avoid deceptive practices in setting fees

The OCC’s current National Bank Charges regulation gives national banks – including trust banks – the authority to establish and charge non-interest fees and charges to its customers. Noticeably absent from this regulation is any requirement to consider consumer impact when setting fees and charges. 

The National Bank Charges regulation does not prohibit unfair, deceptive or abusive acts and practices, leaving consumers vulnerable to extractive and hidden fees with no recourse or without any meaningful consequences for trust banks. This regulatory gap is especially troubling in the context of several recent stablecoin company trust bank charter applicants, who have a history of regulatory violations and enforcement actions. Some of these issues are outlined in NCRC’s recent comment letters on the topic.

Lack of adequate regulatory requirements and internal controls will allow fraud to grow

The regulatory framework that cryptocurrency firms and stablecoin entities are currently governed by is already sorely lacking when it comes to preventing fraudulent activities against consumers. Several of these same companies looking to attain national trust bank charter status have been rife with fraud and cybercrime claims. 

The sector’s money laundering problems have continued despite pledges to shape up, according to new reporting from the International Consortium of Investigative Journalists. Additionally, stablecoin now accounts for 63% of all illicit crypto transactions.

The Financial Action Task Force (FATF), a global finance crime watchdog group, has cautioned that the growing rate of illicit financial activities happening on the crypto industry’s watch is something that could have far-ranging impacts. “With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences,” said the FATF in a recent Reuters article.

Mounting fraud losses and the growing use of private stablecoins as the currency of choice for fraudsters and money launderers is a universal concern that NCRC has highlighted in several comment letters and that other industry trade groups, like ICBA and BPI, have raised issues with as well.

The importance of community development requirements for nonbanks 

Being granted a national trust bank charter has historically been a privilege bestowed on financial entities operating at the highest standards and in the best interests of its stakeholders and the public. Given that stablecoin and cryptocurrency institutions would be permitted new capabilities to take deposits and issue currency akin to traditional banking institutions, it would stand to reason that they should also be held accountable to the same federal regulatory and community reinvestment standards as well. 

“Applying community development obligations to nonbank stablecoin issuers would likely drive billions of dollars into needed community and economic development projects and initiatives,” wrote Kevin Hill, NCRC’s senior policy advisor. “In 2023 alone, banks originated over $127 billion in loans that met the CRA’s definition of community development for LMI communities and households.”

The Community Reinvestment Act mandates that traditional banking institutions equitably serve the credit needs of all communities in this country. If cryptocurrency exchanges and stablecoin issuers want to reap the full monetary and societal benefits of becoming a national trust bank, then they need to reinvest into the communities that they will be extracting value from.

Timantha Goff is the Managing Editor & Writer for NCRC’s Communications team.

Photo credit: Traxer via Upsplash.

The OCC will now factor in whether banks have been closing accounts or refusing services based on a customer’s political or religious beliefs, as well as whether banks have decided not to do business with certain industries, such as crypto firms and fossil fuel companies.

The CRA was a legislative response to how the federal government and the banking industry actively denied access to wealth for people of color by categorizing communities of color as being too risky for home financing opportunities. The CRA was meant to address this systemic disinvestment by evaluating banks on how they serve the credit needs of historically underserved communities.

The OCC’s recent action is being framed as a move to “depoliticize” banking, even though the OCC will now be reviewing bank decisions through the lens of a customer’s political and religious preferences. These changes will also provide very little public benefit, while forcing banks to navigate new contradictory regulations and goals.

Instances of politically or religiously biased debanking will be difficult to prove and could take a considerable amount of time and resources to identify. Less than one percent of filed customer complaints regarding account closures accused banks of closing their accounts for political or religious reasons. Also, banks are unlikely to know their customers’ political affiliations since they don’t collect that kind of information, making it harder to establish supposed discriminatory banking trends. 

Adding political and religious considerations to the CRA process is a major misuse of limited regulatory resources when more needs to be done to ensure economic equality in America. OCC examiners, already stretched thin due to staff reductions, will have less time to review bank efforts to address the lack of affordable housing or the growing divide between rural and urban economies in the bank’s service areas. Also, given that any evidence of debanking is largely anecdotal, the OCC will likely limit the review process to very high profile cases (such as President Trump’s claims against Capital One), thus leading to the CRA benefitting politicians and celebrities at the expense of homebuyers, renters and entrepreneurs.

Another major concern is how this will conflict with the OCC’s money laundering prevention efforts. The Bank Secrecy Act places monitoring and reporting requirements on financial institutions to detect instances of illicit financial practices. Banks could now face a scenario where the OCC is pressuring them to open accounts that either outright violate those anti-money laundering guidelines or assume the burden of undertaking intense oversight and monitoring they don’t have the resources for.

Many banks simply cannot afford the heightened monitoring required to legally serve businesses with a high money laundering risk, such as crypto companies, casinos and payday lenders. Despite legitimate concerns with how crypto can be used to conceal the origins and movement of funds, banks may be forced to serve these companies regardless of the compliance costs or risk CRA downgrades. This will in turn significantly benefit the crypto industry, which spent over $119 million during the last election cycle.

This could also make it harder to reduce carbon emissions and transition to cleaner energy. If banking institutions end up pointing to the OCC’s statement to justify their continued financing of oil, gas and coal projects, it risks locking us into the worst case scenarios of climate change. Given climate change’s disproportionate impact on low- and moderate-income and formerly redlined communities, it would be a cruel irony if a bank’s actions to minimize this impact could now result in lower CRA ratings. 

The CRA is an important and unique law that requires banks to proactively address widespread discrimination and serve all communities equitably. Strengthening and clarifying its rules and regulations could make it an even more effective mechanism for encouraging private capital to address growing economic gaps and ensure no communities get left behind or exploited. 

Reversing the OCC’s decision to repeal the 2023 regulations that brought CRA into the 21st century by accounting for online lending is one example of how the CRA could be modified to better serve widespread economic needs. Instead, the administration and the OCC appear to be using CRA to reward crypto donors.

Kevin Hill is a Senior Policy Advisor with NCRC’s Policy & Government Affairs team.

Photo credit: Expect Best via Pexels.

Overview of the rescission process

Rescission is an executive action that withholds the use of federal funds appropriated by Congress. The President may rescind appropriated funding with Congressional approval as authorized by the Impoundment Control Act (ICA) of 1974. 

The ICA requires the President to first send a request to Congress. Congress has 45 days to approve the request, with the Office of Management and Budget (OMB) withholding the funds until a decision is made on the President’s request. 

The request is then sent to the House and Senate Appropriations committees, which have 25 days to either approve, disapprove or amend the request. After this period has lapsed, it goes to the full floor of both chambers for a simple majority vote. If the rescissions bill does not pass both chambers, the OMB must release the funds. 

The rescissions process has been a regular mechanism of executive power, with it becoming a popular option for the current administration to expand its influence. President Trump proposed one of the largest rescission packages in recent US history, totaling $9 billion, which was passed by Congress in July. The package cancelled appropriated funding for foreign aid programs and the Corporation for Public Broadcasting, which includes NPR and PBS. 

Congress is ultimately responsible for serving as a check on the president’s authority to rescind federal funds, as Article 1 of the Constitution confers the “power of the purse” upon the legislative branch. A president withholding funds without Congressional approval to advance their own political or policy objectives is fundamentally unlawful. 

What are pocket rescissions?

A president can bypass the Congressional approval process to rescind funds that are set to expire within 45 days of the end of the fiscal year, which are known as pocket rescissions. The OMB Director Russell Vought has endorsed the use of pocket rescissions to advance President Trump’s policy agenda.

“The very Impoundment Control Act itself allows for a procedure called pocket rescissions to be able to bank some of these savings later in the year without the bill actually being passed,” Vought told CNN in June. “It’s a provision that has been rarely used. But it is there. And we intend to use all of these tools.”

President Trump recently announced on August 25 that he would be canceling $4.9 billion in foreign aid, giving Congress very little time to approve the request before the funding expires on October 1, which is less than the required 45-day review period. 

The Government Accountability Office (GAO), an independent watchdog agency of the federal government, has made it clear via a 2018 decision that pocket rescissions are illegal. However, this decision is not legally binding, with the power to challenge and strike down acts of impoundment resting with the federal courts. 

A federal district judge ordered the Trump Administration to spend the $4.9 billion in foreign aid funding appropriated by Congress, declaring the unconstitutionality of pocket rescissions. The administration responded by submitting an emergency application to the Supreme Court. The Supreme Court blocked the federal judge’s ruling and allowed President Trump to temporarily freeze the foreign aid funds until it reviews the emergency application.

The Trump Administration appears to be winning the legal battle over the use of pocket rescissions, which they can leverage to further restrict and cancel equity-focused federal programs without Congressional checks.

The impact of rescissions and funding freezes on NCRC members

Many nonprofits have been impacted by the Trump Administration’s withholding of federal funds due to their missions being centered on pursuing racial and economic equity through community development programs and initiatives. In February, President Trump’s freeze on federal grants related to DEI, environmental sustainability and foreign aid put several NCRC members at financial risk. While the freeze has been lifted, the Trump Administration will likely continue using rescissions as a tool to curb the power and influence of economic justice-focused nonprofits. 

The OMB has already withheld significant pots of FY2025 funding for the Community Development Financial Institutions (CDFI) Fund under the Department of the Treasury by abusing the apportionment process. As of now, the OMB has apportioned only $35 million for the CDFI Fund’s administrative costs out of the $324 million that was originally allotted in FY2025. 

The remaining $289 million was intended to go towards CDFI Fund programming, such as the Financial and Technical Assistance grants that are awarded to CDFIs supporting underserved small business owners. Several of NCRC’s CDFI members applied for this funding but may not receive it, which will impact their capacity to financially support small business growth in their communities. 

The OMB may also begin to withhold funding from other departments and agencies that support the community development work of NCRC members, such as the Housing and Urban Development (HUD) and the Small Business Administration (SBA), particularly if their work focuses on advancing equity and inclusion. 

NCRC has developed a rescissions tracker to help NCRC members keep tabs on which funds have been temporarily withheld or completely rescinded. NCRC encourages our members to work with us to protect funding for major community and economic development projects. Lastly, our philanthropic partners – financial institutions and community foundations – should support NCRC members by providing funding to fill in the gaps left by the federal government.

Manan Shah is a Policy & Government Affairs Associate with NCRC’s Policy & Government Affairs team.

Photo credit: Ian Hutchinson via Upsplash.

Belinda is a senior citizen living in Bernalillo County, New Mexico. In 2004, she qualified for a home loan with a monthly payment of $130 based on her yearly income. She has lived in an economically distressed area of the county for over 10 years, which has historically had the highest foreclosure rates in the state due to employment instability.

In 2019, the mortgage lender sold Belinda’s loan to another mortgage company. The transfer caused Belinda’s auto-payments to pause. Due to Belinda’s limited literacy, she was unaware of the transfer, which put her loan into default and her home at risk of foreclosure. 

With the help of NCRC member United South Broadway Corporation (USBC), a housing counseling nonprofit, Belinda was just barely able to keep her home. She was earning just enough to qualify for her lender’s loss mitigation program, thanks to her Supplemental Nutrition Assistance Program (SNAP) benefits.

“If Belinda did not have the income boost from SNAP benefits, she would have lost her longtime home,” said Debbie Norman, program manager at USBC. “She would have most likely ended up homeless.” 

The benefits that saved Belinda are now being yanked away from tens of millions of people. With the One Big Beautiful Bill (OBBB) signed into law, more than 30 million households will face staggering cuts to their SNAP and Medicaid benefits. Disposable incomes will drop and those who are in a similar situation to Belinda won’t be as fortunate. 

Supporters of the OBBB characterize it as a monumental piece of legislation that provides economic relief to low- to moderate-income (LMI) families. However, the research and data paint a different story that is all too familiar to America: one of economic harm being done to the poor and working class while big corporations and the wealthy continue to maximize their financial gains at everyone else’s expense.

A Redistribution of Wealth and Income to the Rich

The OBBB is the largest one-time upward redistribution of income in US history, as economist Josh Bivens put it. The law gives $117 billion to the richest 1% of households, according to the Institute on Taxation and Economic Policy (ITEP) estimates, while offering just $77 billion to the bottom 60% of households. This means that the roughly three million richest Americans will receive almost double the tax cuts as those given to the 200 million least-wealthy Americans – which makes up 64% of the entire population of the country. 

These regressive tax cuts will deepen income inequality. According to the White House, certain tax provisions, such as allowing for no taxes on tips or overtime pay, higher standard deductions, the $40,000 SALT (state and local taxes) deduction and the Child Tax Credit extension, will increase take-home pay by more than $10,000 per year for low- and moderate-income families. 

However, ITEP reports that the bottom 60% of households will only see an average net tax cut of $2,160 annually. These net tax cuts will likely be offset by cuts to Medicaid and SNAP along with further complications from higher costs of goods from tariffs. 

The bill could cost the bottom 10% of households more than $2,500 in annual disposable income, according to the Yale Budget Lab’s estimate of the combined impact of the tariffs and Medicaid/SNAP cuts. Those households will experience an approximately 6.4% drop in their disposable incomes. 

For low- to moderate-income households, $2,500 is not insignificant. It’s the difference between financial stability and financial insecurity. $2,500 could cover monthly rent and utilities, groceries, childcare, unexpected medical expenses or other basic needs that become more costly each year.  

The loss of $2,500 for the average low- to moderate-income household could also mean families are more likely to accumulate debt through the use of predatory loans to help bridge the financial gap – a risk that is even greater as a defunded Consumer Financial Protection Bureau (CFPB) now struggles to protect vulnerable consumers. 

The Effects of Medicaid and SNAP Cuts on Vulnerable Communities

The One Big Beautiful Bill is estimated to slash almost $1 trillion from Medicaid and $230 billion from SNAP over the next decade. On the ground, this will result in up to 15 million people losing their health coverage and 22.3 million people losing some or all of their food assistance benefits due to stringent work requirements. 

Supporters of the bill argue that adding work requirements will increase employment, even though the majority of clients on Medicaid (64%) and SNAP (75%) already work, with the rest being unable to work due to a qualifying disability or caregiving responsibilities. 

On a larger economic scale, the cuts will deplete state and local governments of necessary tax revenues by $12 billion, according to the Commonwealth Fund. State and local governments may have to offset some of these losses by cutting other public services and assistance programs that LMI households benefit from related to housing, transportation, infrastructure and education. 

The Commonwealth Fund also estimates that the cuts could result in a loss of 1.22 million jobs nationwide, which is equivalent to a 0.8 percentage point increase in unemployment — contrary to the goal of the work requirements. 

The Medicaid and SNAP cuts will hit some states harder than others. NCRC member New Jersey Citizen Action (NJCA), a grassroots coalition fighting for racial and economic justice, reported that many of the residents they advocate for will be impacted by the cuts. 

“We’re staring down the barrel of a dramatic rise in the uninsured [with] up to 350,000 residents expected to lose [their] FamilyCare/Medicaid and more than 450,000 on Affordable Care Act marketplace plans see[ing] their premiums increase by 110 percent,” said Laura Waddell, NJCA’s healthcare program director. “That’s around 800,000 people at risk of losing coverage or seeing their health care costs spike dramatically.”

Furthermore, rural communities will face an unprecedented number of hospital closures due to the Medicaid cuts. The OBBB is estimated to reduce $50 billion in federal Medicaid funding for rural hospitals, putting 304 hospitals at risk and potentially leading to 15,000 additional deaths annually. The legislation strips life-saving resources from many of the very people President Trump and his allies pledged to protect. 

NCRC members like the United South Broadway Corporation and New Jersey Citizen Action will continue to show up for clients like Belinda. However, this systemic rupture in our tax code and social safety net will likely increase client intake and overwhelm grassroots nonprofits even further. More low- and moderate-income Americans will now face the real possibility of poverty, eviction, illness and hunger.

Manan Shah is a Governmental Affairs Associate with NCRC’s Policy & Government Affairs team.
Photo credit: Forest Plum via Upsplash.

The program is called Affirmatively Furthering Fair Housing (AFFH). AFFH was created a decade ago during the Obama Administration when, in 2015, then-HUD Secretary Julián Castro implemented AFFH as a regulation. The underlying concept of AFFH was based on the Fair Housing Act, which was Title VIII of the Civil Rights Act of 1968 but has gone largely unenforced for decades.

AFFH is a regulation that requires states, counties and municipalities to demonstrate how they use federal funds to address patterns of racial segregation and unequal access to housing, and how they’re helping racially or ethnically concentrated areas of poverty transform into areas of opportunity. If implemented properly, AFFH has the potential to challenge housing discrimination that limits housing choice due to protected characteristics, such as race, national origin, disability and other attributes. 

AFFH also has the potential to expand access to critical community resources. For example, it could help ensure that all communities have access to decent, safe and affordable housing during a growing affordable housing crisis. AFFH could help communities obtain additional resources, such as affordable housing near public transportation, higher performing public schools and legal representation for low-income tenants facing eviction. 

Since it first implemented AFFH in 2015, the US Department of Housing and Urban Development (HUD) has issued multiple iterations of the regulation, usually with the intent of strengthening the rule. However, after the Biden Administration failed to finalize the 2023 AFFH Interim Final Rule (IFR), the current administration replaced the previous rule with a new AFFH IFR published this year.

Unfortunately, the current AFFH IFR fails to adhere to the spirit of the 2021 AFFH IFR in several important ways. The 2025 IFR strips AFFH of several critical provisions, such as requiring municipalities to provide detailed plans for how they will affirmatively further fair housing. Instead, municipalities only have to certify in writing that they will affirmatively further fair housing without providing supporting evidence that such initiatives are actually taking place. 

Essentially, the 2025 rule relies on local leaders and their developer partners to operate in good faith. We should not expect that to happen on its own, given the history of vociferous opposition to fair housing efforts. The 2025 AFFH IFR also does not mention whether HUD will give municipalities technical assistance, data collection, mapping or assessment tools to diagnose their fair housing issues. This support is vital to help them take the necessary steps to affirmatively further fair housing in their communities. 

Most concerning, the 2025 rule omits the community engagement process entirely. One of the core elements of AFFH is its community engagement requirement. As part of their AFFH plans, municipalities are required to conduct robust community engagement efforts, including at community meetings and through surveys. That mandated outreach allows community members to call attention to the barriers they have encountered in having true housing choice and ensures local advocates can highlight current gaps in neighborhood reinvestment.

These community engagement efforts are important because they allow residents to advocate for local reinvestment in their communities via a transparent process. Well-executed AFFH plans incorporate concerns that residents identify during the community engagement process and develop initiatives to address those concerns.

Boston provides an example. The city ultimately amended its zoning code to prevent further exclusion of vulnerable residents, after local activists turned out around 500 residents to speak up at the meetings about historic exclusionary practices. The Boston Tenant Coalition (BTC), an NCRC member, provided critical resources to help remove obstacles to some residents’ participation in community meetings, such as providing meals and childcare to community members during in-person listening sessions.

Additionally, clear and accessible language helped residents understand and accurately complete fair housing surveys that the BTC and the Boston Housing Authority (BHA) distributed to community meeting attendees and public housing residents. As a result, approximately 2,500 Boston residents replied to both surveys, with their answers helping to inform the City’s 2022 Assessment of Fair Housing study.

Boston residents’ activism helped the city pass the fair housing amendment to its zoning code in 2020. Residents’ concerns around gentrification, displacement, ensuring equitable accommodations for people with disabilities and affordable housing informed the amendment.  The amendment requires developers to take meaningful actions to address displacement, provide equitable access to housing and consider their project’s impact on residents of areas that endured historical discrimination. These efforts underscore the importance of community engagement throughout the AFFH process to help residents advocate for resources or policies they need to help them thrive in and remain in their communities.

Boston’s experience demonstrates how the AFFH community engagement process, if employed correctly, would give everyday Americans the mechanism to advocate for fair housing choice and obtain much-needed housing resources for their communities. The current AFFH rule deprives Americans of a significant mechanism to achieve equal access to housing and more sustainable community and economic development programs. HUD should reinstate the 2021 AFFH IFR and re-empower local communities to name and confront the fair housing challenges occurring in their own communities, and know they had a say in the path their leaders ultimately take.

Nichole Nelson is a Senior Policy Advisor with NCRC’s Policy & Government Affairs team.

Photo credit: Qusai Akoud via Upsplash.

In the past five years, the size of the stablecoin market has risen from approximately $5 billion to over $250 billion. Stablecoins have allowed more people than ever before to access sophisticated payment and banking services without having to rely on traditional financial intermediaries.

Stablecoins offer the most compelling use cases in countries where currency fluctuation is extreme and banking and regulatory regimes are less sophisticated.

Stablecoins often function like a gift card by providing a convenient way to store cash on a blockchain without it being exposed to large price movements. Traditional cryptocurrencies like Bitcoin and Ethereum are normally subject to high price volatility.

Potential Risks of Stablecoins

Stablecoins present a unique risk to community banks as they compete with fintechs for customers. The technology allows people to bypass banks – a threat known as disintermediation – with the mix of benefits and risks that come with sidestepping the traditional wraparound relationship between customer and service provider. The US Treasury’s Borrowing and Advisory Committee (TBAC) estimated that as much as $6.6 trillion in deposits are expected to move from the traditional finance sector into the stablecoin market by 2030. 

That seismic shift threatens fundamental upheaval to economic development. A dollar moved from traditional deposit accounts to stablecoins does not circulate through the wider economy in the same way. Multiple organizations, such as the Independent Community Bankers Association (ICBA), have noted that community banks use deposits to originate approximately 60% of all small business loans and 80% of agricultural loans nationally.

The risks posed by this level of disintermediation could be existential for low- and moderate-income (LMI) communities. The Community Reinvestment Act (CRA) requires banks to serve credit needs of LMI communities in order to prevent redlining and unequal access to wealth building opportunities, including direct lending as well as financing for community development projects.

If the stablecoin market disrupts traditional banking’s ability to invest in these community development projects, it could significantly reduce funding for local affordable housing efforts and small business assistance programs. Banks will have less capital to lend and will see their CRA obligations reduced as their assets decline from a drop in deposits. 

The Need for Community Development Obligations

Under both the Senate’s recently passed GENIUS Act and the STABLE Act that’s been introduced in the House, stablecoin issuers would function similarly to banks by taking in deposits in compliance with reserve requirements. Bank deposits are insured by the FDIC in order to boost a consumer’s confidence that money will be available when consumers need it. This guarantee has been in place for so long that many of us take it for granted. However, without deposit insurance guarantees, money would not be available to depositors should the bank fail due to mismanagement or an economic downturn, and banks would struggle to retain customers.  

The CRA states that banks which benefit from federal deposit insurance have an obligation to meet the credit needs of entire communities, meaning that banks cannot solely serve the wealthiest customers. They must serve the needs of low- and moderate-income households as well. Accordingly, if nonbanks become stablecoin issuers, they should be held to CRA-like standards as they will also rely on a supervisory regime that assures consumers stablecoins are sound ways to store money within their institutions.

Stablecoin legislation should require stablecoin issuers to reinvest a portion of their proceeds into community development projects in underserved communities. This would not be difficult from a regulatory perspective as the OCC, FDIC and the Federal Reserve already have established methods for rating a bank’s community development performance. Traditional deposit insurance is a form of public subsidy to the banking industry, in exchange for which banks accept obligations to the public interest. The same exchange should apply to stablecoin issuance.

Applying community development obligations to nonbank stablecoin issuers would likely drive billions of dollars into needed community and economic development projects and initiatives. In 2023 alone, banks originated over $127 billion in loans that meet the CRA’s definition of community development for LMI communities and households. In addition, ensuring community development conditions are being met by nonbank issuers would also allow for a more level playing field between banks, especially community banks –  and nonbank issuers.

Bakari Levy is a Government Affairs Associate with NCRC’s Policy team.

Kevin Hill is a Senior Policy Advisor with NCRC’s Policy team.

Photo credit: Marta Branco via Pexels.

Immigrant-owned businesses create jobs, increase cultural diversity within cities and serve as a force of economic prosperity throughout the United States. According to a 2024 report from the American Immigration Council, roughly 46% of all Fortune 500 companies were founded by immigrants or children of immigrant entrepreneurs. These communities make up a large portion of America’s small businesses and are integral to the health of our nation’s economy. 

Despite their importance within American society, it has become increasingly difficult for these immigrant-run small businesses to thrive due to current anti-immigrant policy changes at the federal level. Immigrant entrepreneurs are finding it difficult to overcome administrative obstacles, such as the stringent enforcement of visa requirements and having to navigate through new national and state business licensing changes. 

These challenges may soon become even harder to overcome after the House of Representatives passed H.R. 2966 (also known as the American Entrepreneurs First Act of 2025) this past Friday. The bill requires those seeking Small Business Administration (SBA) and 504 loans to present proof of their American citizenship or permanent legal status. These capital programs are currently available only to companies with at least 51% American ownership. The bill now available for Senate consideration would bar any business with even a minority ownership share held by someone without permanent legal status or American citizenship.

The passage of this problematic bill will effectively prohibit immigrants with temporary protected status, student visas, DACA recipients and other non-citizens from receiving the necessary funding to realize their entrepreneurial dreams. 

“Many immigrant entrepreneurs who contribute to their community and local economy through their small business are now fearing deportation,” said Lauren Wolters, a Policy Associate at NCRC. “This new bill would increase fear in our nation’s immigrant communities and likely result in the closure of many of their businesses.”

Immigrant-owned small businesses employ millions of Americans, which are a vital source of economic growth and contribute billions to the American economy. Bills that aim to restrict immigrant small business creation and growth, such as H.R. 2966, would cause irreparable harm to an integral group of this country’s workforce that has been beneficial both economically and culturally for many years. Immigrant-owned small businesses have left an indelible mark on American society and it is imperative that their right to contribute to the economic health and cultural fabric of this nation remain intact. 

“Immigrants are not just workers filling gaps in our economy. They are innovators, caregivers, community leaders, and family members,” said Ai-jen Poo, director of the National Domestic Workers Alliance. “Our economy and our society are deeply rooted in the labor, love, and sacrifices of immigrant communities. To value immigrants is to value the future of our nation.” 

Peter Chamoun is an Intern with NCRC’s Marketing and Development team.

Photo credit: Anton Ivanov via Pexels.