Trump fund freeze that even Republicans don’t like hits 118-year-old Durham bank
I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly newsletter on business, labor and technology in North Carolina.
Seven months into the second Trump administration, there have been a dizzying number of cuts, freezes and outright eliminations to federal programs that impact the Research Triangle area. Here’s one more.
Since the 1990s, Congress has appropriated money for the Community Development Financial Institutions (CDFI) fund to give grants to organizations (CDFIs) that provide at least 60% of their loans to businesses in lower-income and underserved communities. The program has enjoyed strong bipartisan support due to its work in both rural and urban communities.
This year, Congress approved $324 million to fund more than 1,400 CDFIs, including 26 in North Carolina. However, the U.S. Office of Management and Budget under director Russell Vought has not released this money to the Treasury Department — and won’t say if or when it will.
Last month, 25 senators — 13 Democrats and 12 Republicans — wrote Vought a letter asking him to detail how OMB will disburse this year’s approved funds. A spokesperson for Sen. Mark Warner of Virginia told me he has not responded.
And that’s just for 2025. The White House’s 2026 discretionary budget proposal removes $291 million in CDFI Fund grants and instead creates a $100 million grant program exclusively for rural communities. “Past awards may have made race a determinant of access to loan programs,” OMB wrote in its proposal.
North Carolina’s CDFIs include Self-Help Credit Union and M&F Bank in Durham. The former received a $10 million CDFI fund grant in 2023. The latter is the country’s second oldest Black-owned bank and a fixture of the former Black Wall Street neighborhood downtown. Last year, it received $280,000 through the CDFI Fund. While perhaps a modest sum in the financial world, this money helped the community bank originate 10 times that amount in loans, says M&F CEO Jim Sills.
“That is one of the best programs in the federal government system,” he told me in an interview this week.
Sills also discussed the government’s “pendulum swing” on diversity since the 2020 murder of George Floyd and acknowledged there is room to “take race out of” business programs. For the CEO, it is a time for balancing legacy while adjusting to the current reality.
Vulcan has juice
A startup raising $65 million within its first two years typically only happens in so-called “hype” markets, says Tobi Walters of Cofounders Capital in Cary. Think AI.
And think domestic rare earth magnets. Founded in 2023, the Research Triangle Park startup Vulcan Elements has seized on the U.S. government’s drive (across both the Biden and Trump administrations) to lessen our reliance on China for these critical components, which are found in everything from weapons systems to baseball bats.
This spring, Vulcan opened its RTP facility at a ceremony that drew some notable guest speakers for such a young company. And on Monday, Vulcan announced a $65 million Series A round, through which it aims to launch U.S. production.
It is clear defense tech is having a moment. China dominates the rare earth magnet supply chain for a reason though, and industry experts warn there are hurdles to onshoring.
Clearing my cache
- Inc. Magazine released its, um, exclusive list of the 5,000 fastest-growing private companies in the country. North Carolina had 128 entries, with Greensboro’s infusion pharmacy AveveRX ranking highest at No. 10.
- Cary’s Epic Games can defeat Apple and Google in other countries, too. The local Fortnite maker partially won its anti-competition cases against the two tech companies in Australia.
- NCInnovation CEO Bennet Waters will step down next year as the future of his nonprofit’s $500 million endowment is in the hands of (some) skeptical state legislators.
- Last month, I wrote about the severe financial crunch facing Natron Energy, a sodium-ion battery startup that had committed to build a $1.4 billion factory in Edgecombe County. Natron never responded to reports this project is paused, but in a LinkedIn post earlier this summer, Natron cofounder and former CEO Colin Wessells said the cratering price of lithium-ion “has made it nearly impossible to build a profitable business around energy storage products based on new chemistries.”
- More Edgecombe news: A company called Energy Storage Solutions has proposed building a $6.4 billion data center in the county seat of Tarboro, Triangle Business Journal reports.
- Winston-Salem’s Hanesbrand is being bought by activewear competitor Gildan for $2.2 billion, combining two of North America’s biggest apparel makers.
- Humacyte saw its share price sink 25% this week after recording revenue well below market expectations. A Durham firm, Humacyte bioengineers regenerative human tissues and launched its inaugural commercial product Symvess early this year.
- More not-great stock news: Despite another strong quarter from its Raleigh software subsidiary Red Hat (up 14%), IBM has seen its share price slump over the past month — down nearly 20% from a record-high earlier this summer. Lower-than-expected software sales and forward guidance are to blame.
IBM is still up on the year, but at a time when tech stocks everywhere seem to be soaring, it’s notable. Big Blue hopes its latest quantum computing update will reignite investors.
National Tech Happenings
- AOL is finally ending its once ubiquitous dial-up service. A small percentage of North Carolina residents still use dial-up.
- GPT-5 is here. Reaction to OpenAI’s latest AI platform has been negative.
- The answer chatbot Perplexity has offered to buy Google’s Chrome for $34.5 billion after the Department of Justice proposed Google divest its browser after an antitrust ruling last year went against the search giant.
- In an unorthodox move, President Donald Trump announced the U.S. will allow chipmakers Nvidia and AMD to sell to China in exchange for a cut of their revenues. Whether the law allows this type of arrangement is TBD.
Thanks for reading!
This story was originally published August 15, 2025 at 9:32 AM.
