Warner: Directive to lay off CDFI staff likely came from OMB

•  Key insight: Senate Banking Committee member Mark Warner, D-Va., said that the order likely came from the Office of Management and Budget, rather than Treasury. 
• Forward look: Warner will pressure the Treasury to reinstate the fired workers, but how effective that pressure is will depend on how much Republican support Warner can muster for the cause. 
• What’s at stake: The outcome of the fight is a bellwether for how much the White House and OMB are willing to shut down programs that are statutorily mandated by Congress. 

WASHINGTON — Sen. Mark Warner, D-Va., co-chair of the Community Development Finance Institutions caucus in Congress, said that he believes the order to lay off the entire staff of the Community Development Financial Institution Fund came from the Office of Management and Budget. 

The CDFI Fund is housed in the Treasury Department, and the reduction-in-force notices came from the Treasury. 

“The [Reduction in Force] is necessary to implement the abolishment of the Community Development Financial Institutions (CDFI) which is based upon the Department of Treasury determination that its programs, projects, and activities do not align with the President’s priorities,” the RIF notices say.

But Warner said in a call with reporters that it’s his belief that OMB directed the layoffs and apparent dissolution of the program, whose programs the Treasury told OMB earlier this year are all statutorily mandated, theoretically insulating them from cuts. 

“We think this directive came from OMB,” Warner said. “The idea that an OMB director can just unilaterally lay off its entire staff seems to me to go completely against the law and the purpose of the law.” 

Warner said that sentiment was born out of his and his staff members’ interactions with Treasury and OMB in their efforts to get CDFI funds released.  

“I felt along the way as we were trying to get some of the CDFI Funds released — because, again, this is one of the areas that OMB had targeted — we were operating under the premise that Treasury was supportive,” Warner said. “I’ve not seen the RIF notice per se, but you can’t simply dismantle a program that is in law by statute.” 

The CDFI Fund has been a target of the White House and OMB since the beginning of the administration, with the White House issuing an executive order in February dissolving the program to the extent it is not statutorily mandated. 

Treasury sent a note to OMB in March saying that all the CDFI’s programs are statutorily mandated. Since that time, OMB hasn’t apportioned funds that would otherwise be awarded to CDFIs. 

“Either some folks at OMB are ignorant of the law, or just consciously negligent,” Warner said.