New budget-cutting executive order targets funding for minority businesses, entrepreneurs and communities

By Wesley Brown

March 16, 2025 – Two federal agencies dedicated solely to supporting minority businesses, financial institutions, and entrepreneurs are now on the chopping block for permanent closure as the Trump administration implements the Project 2025 blueprint.

As the U.S. Senate approved a stopgap appropriations bill on Friday to prevent the federal government from shutting down, President Trump quietly signed an executive order to shutter the Minority Business Development Agency (MBDA) and the Community Development Financial Institution Fund.

Under the $1 trillion Bipartisan Infrastructure and Jobs Act approved by Congress in November 2021, the MBDA was made a permanent federal agency and given over $110 million in new annual funding through 2025. Before the law was passed, the federal Department of Commerce sub-agency had no permanent budget or spending authority to fund its 26 MBDA centers across the U.S.

The 2021 law also awarded the agency $2.1 million to open new MBDA Centers in Arkansas, Indiana, Oregon, South Carolina, Utah, and Wisconsin. In late 2023, the U.S. Small Business Administration partnered with Communities Unlimited (CU), a rural Community Development Financial Institution (CDFI), to open the state’s first MBDA Business Center in Fayetteville. The law further mandated the MBDA expand its influence and reach to support the 9.7 million minority business enterprises (MBEs) across the U.S. 

The CDFI Fund, administered by the U.S. Department of the Treasury, provides capital grants, equity investments, and technical assistance to mission-minded CDFIs like Communities Unlimited, Bancorp South, People’s Trust, and Arkansas Capital Corp. These privately held banking institutions are mandated to serve the needs of low—and middle-income individuals in urban and rural communities, which traditional banks and lending often ignore.

With his executive order, Trump said he is further decreasing the size of the federal bureaucracy to enhance accountability, reduce waste, and promote innovation. Other federal agencies planned for closure are the Federal Mediation and Conciliation Service, the U.S. Agency for Global Media, the Woodrow Wilson International Center for Scholars in the Smithsonian Institution, the Institute of Museum and Library Services, and the U.S. Interagency Council on Homelessness.

“The Department of Government Efficiency (DOGE) has already identified billions in waste, fraud, and abuse,” Trump stated. “Cutting these governmental entities will save taxpayer dollars, reduce unnecessary government spending, and streamline government priorities.”

As part of the president’s ongoing efforts to cut federal jobs and terminate all DEI initiatives in the federal government, the heads of seven agencies on the closure list must submit a report to the White House Director of the Office of Management and Budget by March 21 confirming full compliance with the executive order.

Project 25 disciples take top positions in Trump administration, pushing DEI lawsuits

The White House budget office, headed by Project 2025 architect Russell Vought, has also been ordered to reject any ongoing funding request for the seven federal agencies on the president’s closure list.

The dismantling of the MBDA was part of the blueprint for overhauling the federal government through Project 2025, a 920-page conservative playbook that Trump disavowed during the presidential campaign. However, many initiatives included in the voluminous plan are being implemented through executive orders or by Elon Musk’s Department of Government Efficiency, or DOGE.

For example, Project 2025’s recurring recommendations to dismantle and erase all DEI programs, jobs, and initiatives in the federal government have been implemented almost verbatim since Trump took office on Jan. 20. In addition, Project 2025 disciples such as Vought, White House adviser Stephen Miller, White Press Secretary Karoline Leavitt, Federal Aviation Administration nominee Brendan Carr and Homeland Security Border Czar Tom Homan all have top positions in the administration.

At the same time, following the Supreme Court’s historic 6-3 ruling in June 2023 to end the use of affirmative action in college admission, several conservative law firms are clogging the federal court system lawsuits seeking to end all DEI programs in the public and private sector.

Edward Blum, who leads a Wisconsin law firm called the American Alliance for Equal Rights, was involved in the Supreme Court case that ended affirmative action at American universities and colleges. He is also working to stop DEI initiatives at major U.S. corporations.

Besides the Supreme Court case, Blum’s most publicized win occurred in June 2024 when a federal court ruled that the Atlanta-based Fearless Fund’s grant competition was illegal because it is open only to Black women-owned businesses. After the U.S. Court of Appeals court ruling in Atlanta, the Black venture capital firm settled with AAER and permanently closed the $20,000 grant fund for women of color instead of opening it to all races.

Miller, President Trump’s deputy chief of staff and top immigration policy adviser is also the founder of America First Legal (AFL), which has filed dozens of lawsuits that align with Project 2025 and current administration policies. Additionally, several AFL lawsuits against the Biden administration are still being worked through in the court system, including the Freedom of Information Act litigation against alleged Trump enemies and Title IX and First Amendment litigation to halt federal transgender mandates.

Miller’s firm has also staked out a niche in filing lawsuits against “woke corporations and universities.” AFL was one of the first law firms to launch a legal attack against Target Corp. and its board of directors for adopting policies on Environmental, Social, and Governance (ESG) and DEI mandates. Earlier this year, Target was among dozens of Fortune 500 companies deciding to end their DEI programs. This has led to public backlash from Black shoppers and a precipitous decline in the company’s profits and stock price.

The conservative legal backlash has also sought to turn back earlier Biden-era programs that sought to repair past discrimination by the federal government against Black and other minority citizens in everything from housing and property appraisals to bank lending and access to loans and business capital.

A year ago, Judge Mark T. Pittman of the U.S. District Court of the Northern District of Texas, who Trump appointed, ruled that the MBDA’s eligibility parameters violate the Fifth Amendment’s equal protection guarantees because they presume that racial minorities are inherently disadvantaged. That ruling forced the MBDA to begin serving people regardless of race. The agency, which President Nixon established to help Black, Hispanic, and minority-owned businesses, did not have a congressionally approved budget until the pandemic.

Also, reverse discrimination lawsuits by conservative law firms and white plaintiffs have halted decades-long reparations to Black and minority farmers and ranchers who suffered from decades of USDA discrimination in lending and servicing practices. The $1.9 trillion American Rescue Plan Act (ARPA) signed in 2021 set aside $5 billion in debt relief and other efforts to help socially disadvantaged farmers, including dozens in Arkansas.

Elon Musk’s CDFI purge

Concerning the CDFI Fund, Elon Musk’s DOGE is recommending that the Treasury Department cancel hundreds of contracts that leverage private capital investment in primarily Black and Hispanic communities with high poverty and unemployment rates. Through 13 rounds of the NMTC program going back to 2002, the CDFI Fund has made 1,032 awards, allocating $50.5 billion in tax credit authority to CDEs through a competitive application process.

Since 2003, Arkansas has received over $608 million in New Markets Tax Credit (NMTC) funding from the U.S. Treasury’s CDFI Fund. In September, the CFDI Fund awarded $5 billion in NMTCs to 104 community development entities (CDEs) across the U.S.

Little Rock-based Arkansas Capital Corp.’s (ACC) Heartland Renaissance Fund has been the biggest benefactor from the tax credit program, receiving $425 million in NMTC funding awards. Arkadelphia-based Southern Bancorp Bank has also received $145 million from the U.S. Treasury fund.

The two Arkansas-based CDFIs have invested in a wide range of statewide projects from the Arkansas Museum of Fine Arts children’s arts program to a state-of-the-art, 6,600-square-foot nursing facility at Ouachita Baptist University with more than $1 million of simulation technology and medical equipment.

Jackson, Miss.-based Hope Enterprise Corp., a CDFI, and Tupelo, Miss.-based Cadence Bank, one of the nation’s largest regional banks, have also received hundreds of millions of dollars in Treasury tax credits to finance local construction and economic development projects across Arkansas.

The U.S. Treasury Trust also awards funding to rural and urban CDFIs to offer “small money” loans, business capital, and other lending and financial products in underserved communities. In November, Fayetteville-based Communities Unlimited, Carlson Bancshares of West Memphis, and Farmers Bancorp of Blytheville each received $1.1 million in CDFI program funding, while First National Financial Corp of McGehee, Pine Bluff Cotton Belt Federal Credit Union (FCU), and Fordyce-based FBT Bancshares each received $1 million.

Other Arkansas CDFIs, including First National Bancorp of Green Forest, Southwest Arkansas Bank Corp of Lake Village, Hugo-based Southwest Financial Bankstock, UP-Arkansas FCU of North Little Rock, and TruService Community FCU of Little Rock, received between $300,000 and $850,000.

Under the U.S. Treasury’s Small Money Loan program, People’s Trust of Little Rock and Southern Bancorp Bank of Arkadelphia were allocated $292,783 and $383.223 in funding, respectively. People’s Trust is led by founder and CEO Arlo Washington, a Black-owned CDFI that offers “small money” loans to “unbanked” individuals and families as an alternative to payday and other high-fee loans.

Since the Trump administration has targeted the CDFI Fund, the national CDFI Coalition, co-founded by former Arkansas Gov. and President Bill Clinton, has written a letter to Congress in support of the fiscal year 2025 federal funding of $354 million recommended in February by the Senate Appropriations Committee.