All federal financial institution regulatory agency leaders are being urged to “consider the needs of consumers who may be experiencing temporary financial hardship in meeting credit obligations as a result of the Trump shutdown” by the chairwoman of the House Financial Services Committee.
In a Friday letter to the five leaders of the agencies (the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corp. (FDIC), Federal Reserve, National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC), Committee Chairwoman Maxine Waters (D-Calif.) requested “immediate actions by the regulators to, at the very least, reaffirm a joint statement the agencies issued in 2013 to provide guidance to their regulated financial institutions to ensure the over 800,000 federal employees and others affected by the Trump shutdown are not punished as a result of a temporary period of financial stress.”
Friday was the first payday for federal workers since the federal shutdown began 21 days ago.
The committee chairwoman said reaffirming the 2013 letter would inspire creditors to consider adjusting or altering terms on the existing payments for car, private education or student loans, mortgages, credit card payments and other outstanding credit obligations.
“This is important to ensure that customers can meet loan payments and avoid high fees and other penalties that they may otherwise incur,” Waters wrote. “Through no fault of their own, some affected federal employees and others, such as federal contractors, may be unable to pay all their bills on-time because of the shutdown. Once negative information is reported to consumer reporting agencies, affected employees are likely to see a reduction in their credit scores. This may limit their ability to access credit or result in their being offered higher rates and more costly terms on credit in the future.”
(A number of credit unions and banks have, short of regulatory guidance, already have begun reaching out to members and customers who are furloughed by the federal government during the shutdown, which was spurred by a dispute between President Donald Trump and Congress over federal spending, particularly with regard to a wall on the southern border.)
Waters told the regulators that it is “imperative for your agencies” to take steps to protect consumers who could experience financial hardships. “I strongly urge your agencies to, once again, proactively notify regulated entities and the public that prudent workout arrangements assisting innocent borrowers harmed by this shutdown will not later be criticized by examiners, as long as they are consistent with safety and soundness principles.”
The chairman of the committee (which has oversight of all five agencies) also wrote that “As I wrote to your agencies in 2013, it is in no one’s interest to punish affected consumers who may be enduring this temporary period of financial stress.”
She told the agency leaders she wanted a written response to her request (“prompt” attention to “this urgent matter”).