Statement from the Association for Enterprise Opportunity (AEO) on the Executive Order: “Continuing the Reduction of the Federal Bureaucracy”

March 17, 2025

Statement from the Association for Enterprise Opportunity (AEO) on the Executive Order: “Continuing the Reduction of the Federal Bureaucracy”

The Association for Enterprise Opportunity (AEO) expresses deep concern regarding the recent executive order, Continuing the Reduction of the Federal Bureaucracy, issued on March 14, 2025. While this order does not eliminate the Community Development Financial Institutions (CDFI) Fund or the Minority Business Development Agency (MBDA) entirely, it significantly reduces their budgets to only statutory minimums. These reductions could result in diminished staff capacity, scaled-back programming, and the elimination of critical initiatives that have historically supported small businesses and economic development efforts across the country.

For decades, CDFIs have played a critical role in fostering economic development, expanding access to capital, and driving financial inclusion in communities that have historically been underserved by mainstream financial institutions. Since its inception in 1994, the CDFI Fund has provided more than $7.4 billion through various monetary award programs, allocated $76 billion in tax credits via the New Markets Tax Credit Program, and guaranteed nearly $2.5 billion in bonds. These investments have strengthened nearly 1,500 certified CDFIs operating in all 50 states, the District of Columbia, Guam, and Puerto Rico, enabling them to provide affordable financial services, facilitate job creation, finance affordable housing, and support local economic revitalization. Reducing the CDFI Fund’s budget to the statutory minimum jeopardizes these efforts and could limit access to capital for small businesses, rural and urban communities, and other sectors reliant on CDFI lending.

Similarly, reductions to the MBDA’s budget will hinder the agency’s ability to provide targeted support, technical assistance, and access to contracting opportunities that have helped drive the growth of minority-owned businesses in the U.S. In 2023, certified minority business enterprises (MBEs) generated $363.6 billion in annual revenue—a 15% increase from the previous year—and supported one million U.S. jobs, reflecting a 4.5% rise. Black-owned businesses alone saw gross revenues climb from an estimated $127.9 billion in 2017 to $211.8 billion in 2022, a 66% increase. The MBDA has been instrumental in ensuring these businesses have the resources and market access needed to sustain their growth and competitiveness in the national and global economy. Any effort to curtail the agency’s functions risks undoing the progress made in closing the economic equity gap.

AEO urges the administration to reconsider the implications of this executive order. Weakening the capacities of the CDFI Fund and the MBDA would undermine decades of progress in fostering entrepreneurship, economic mobility, and financial inclusion. We call upon policymakers to preserve and expand investments in these institutions, which have demonstrated measurable success in supporting the nation’s economic growth and ensuring equitable opportunities for all business owners.

AEO remains committed to engaging with federal agencies, private sector partners, and community leaders to safeguard the resources and policies necessary to support small business owners and advance economic opportunity nationwide.

Official Quote from Natalie Madeira Cofield, CEO of AEO, on the Executive Order “Continuing the Reduction of the Federal Bureaucracy”

“Small businesses are the backbone of the American economy, and the resources provided by the CDFI Fund and MBDA have been instrumental in driving economic growth, job creation, and financial inclusion. While this executive order does not eliminate these agencies, reducing their budgets to the statutory minimum threatens to undermine the progress made in expanding access to capital and opportunity for entrepreneurs across the country. Limiting the capacity of these institutions will have real consequences—fewer resources, fewer programs, and fewer pathways to success for small business owners. Now, more than ever, we must strengthen, not weaken, the infrastructure that supports entrepreneurship and economic mobility in the U.S.”