New Transparency Act Makes Oversight of Community Development Fund Optional for Congress

The CDFI Fund Transparency Act is a very short piece of legislation that changes the rules for how Congress gets updates on the Community Development Financial Institutions (CDFI) Fund. Essentially, it mandates that the Secretary of the Treasury must testify before key Congressional committees about the Fund’s operations, but only if they are specifically asked to do so.

The Fine Print on Accountability

Before this Act, the rules for the Treasury Secretary’s testimony regarding the CDFI Fund were likely less formal or less explicitly defined in law. This bill establishes a formal requirement for the Secretary to appear before the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services to discuss the Fund’s performance in the previous fiscal year (SEC. 2.). The CDFI Fund is important because it provides capital and support to financial institutions that serve underserved communities—think small business loans in rural areas or affordable housing financing in low-income neighborhoods. So, knowing how that money is being spent matters a lot.

Oversight: Now Serving, But Only Upon Request

Here’s the catch, and the part that changes the game: the Secretary only has to show up if the Chair of the Senate Committee and the Chair of the House Committee both jointly request the testimony. This means the annual check-in is no longer a given; it’s now entirely discretionary, resting in the hands of two people. If those two chairs decide they don’t need an update, or if they’re busy with other priorities, the Secretary is off the hook, and the public doesn’t get that mandated, direct line of oversight.

What This Means for Real People

For the average person, this bill is a mixed bag when it comes to accountability. On one hand, it formalizes the process, giving Congress the explicit authority to demand an annual report on a program designed to help local economies thrive. This could lead to better transparency if the committees use their power. For example, if a small business owner in a struggling town depends on a CDFI-backed loan, the committees could grill the Secretary on whether the Fund is actually reaching those most in need.

On the other hand, by making the testimony conditional, the Act introduces a potential oversight gap. If the chairs choose not to request the testimony, the committees—and, by extension, the public—lose a guaranteed annual opportunity to scrutinize how billions of dollars are being used to support community development. It effectively turns a potential mandatory annual review into a political choice, meaning accountability for the CDFI Fund is now subject to the legislative calendar and the priorities of two key leaders. When it comes to government spending, making transparency optional is always something worth paying attention to.