Just minutes after the powerful chairwoman of a House committee overseeing their agencies issued a letter to them, the five federal financial institution regulators issued a joint statement encouraging financial institutions to work with consumers affected by the federal government shutdown.
“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 regulators’ statement said. 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) — along with the Conference of State Bank Supervisors (CSBS), representing state financial institution regulators — jointly issued the statement.
“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 statement noted.
Earlier Friday, House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) issued a statement urging the regulators to call on the financial institutions they regulated to “consider the needs of consumers who may be experiencing temporary financial hardship in meeting credit obligations as a result of the Trump shutdown.”
Friday was the first payday for federal workers since the federal shutdown began 21 days ago, 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
In their joint statement, the regulators said that “prudent workout arrangements that are consistent with safe-and-sound lending practices are generally in the long-term best interest of the financial institution, the borrower, and the economy.” They said such efforts should not be subject to examiner criticism.
“Consumers affected by the government shutdown are encouraged to contact their lenders immediately should they encounter financial strain,” the regulators wrote.
The response from the regulators came within 30 minutes of the release of Waters’ letter — in which she asked for a “prompt response” to her missive.