U.S. regulators ask banks, financial institutions to work with shutdown workers

by Wesley Brown ([email protected]) 208 views 

The five federal financial institution regulators and state regulators from across the U.S. are encouraging financial institutions to work with consumers affected by the federal government shutdown.

The statement, which was issued by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, the National Credit Union Administration and the Conference of State Bank Supervisors, encouraged consumers to contact lenders to discuss specific arrangements.

“While the effects of the federal government shutdown on individuals should be temporary, affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards,” the statement read. “As they have in prior shutdowns, the agencies encourage financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers.”

The fiscal year for the U.S. government began on Oct. 1, 2018, and Congress has passed just five out of 12 appropriations bills setting discretionary spending levels. Lawmakers had until midnight on Dec. 21, 2018, to enact legislation to fund the programs covered by the remaining seven appropriations bills, but they allowed that funding to lapse.

The federal government has now partially shut down since Dec. 22. Before the shutdown occurred, President Donald Trump refused to extend short-term funding to keep the government open without funding for his campaign promised funding of more than $5 billion to go toward a wall along the U.S.-Mexico border. Since early January, more than 800,000 government workers have been without a paycheck.

U.S. banking regulators said banks should make “workout arrangements that are consistent with safe-and-sound lending practices and are generally in the long-term best interest of the financial institution, the borrower, and the economy. Such efforts should not be subject to examiner criticism.”

Although several national banks have publicly announced plans to aid government workers, most Arkansas banks have been quiet about their efforts to aid those not receiving paychecks. Consumers affected by the government shutdown are encouraged to contact their lenders immediately should they encounter financial strain, regulators said.