With the federal government shutdown clash involving President Trump and Congressional leaders already lasting longer than any impasse in history, policymakers, banking leaders and finance companies are all collaborating to help impacted federal workers who are not being paid their wages.
Following a statement by five federal and state financial regulators, Consumer Bankers Association president and chief executive Richard Hunt shared strategy similar to what’s been offered by an array of finance companies who have contract holders with interrupted incomes. It is estimated that more than 800,000 workers are not getting paid during the shutdown.
First, here is what policymakers said in a joint statement that included Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Federal Reserve Board and the Conference of State Bank Supervisors.
“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 policymakers said. “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.
“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. Such efforts should not be subject to examiner criticism,” they continued.
“Consumers affected by the government shutdown are encouraged to contact their lenders immediately should they encounter financial strain,” they went on to say.
Hunt replied to regulators outlining the assistance programs banks are proactively offering customers impacted by the shutdown. Hunt’s letter that’s available here also thanked regulators for offering guidance similar to that issued during previous shutdowns.
“Consumer Bankers Association member institutions work with customers facing hardships — whether manmade or natural — every day. Banks are working with customers on a one-on-one basis as the partial government shutdown continues and federal employees, through no fault of their own, begin missing paychecks and small businesses are not able to access Small Business Administration loans,” Hunt wrote.
“We know federal employees had no role in this shutdown, neither did banks. As with so many other issues ranging from wildfires, floods and hurricanes to data breaches at retail giants, banks are the ones on the front lines helping make it right for their customers,” he went on to state.
Hunt also appreciated the regulatory guidance, noting it “will enable banks to do more for their customers impacted by this partial shutdown.”
Since the partial shutdown began on Dec. 22, banks have offered furloughed federal workers a variety of assistance, including:
— Temporary hardship programs
— Automatically waiving or refunding overdraft and monthly service fees
— Increasing overdraft limits
— Offering access to certificates of deposit without penalty
— Providing loan payment assistance
— Suspending collection calls
— Streamlining unsecured loans
Along with banks, finance companies are also helping impacted federal workers who have vehicle installment contracts.
For example, Hyundai has relaunched its Assurance program like the automaker did in 2013. Under the plan, the OEM will extend all Hyundai Capital auto loan and lease payments for 30 days for current Hyundai owners who are federal government employees furloughed during the shutdown.
“We recognize that there are many federal employees who are Hyundai owners and are not receiving their normal pay check," said Brian Smith, chief operating officer of Hyundai Motor America. “Hyundai is a brand that aims to make things better for its customers, and this is our way of showing customers ‘We have your back’ during this uncertain time.”
Meanwhile, other captives such as GM Financial and Ford Motor Credit each have alerts at the top of their websites, directing furloughed federal workers who have been impacted to contact them as soon as possible to make payment arrangements.
When the shutdown will end probabaly can’t be predicted based on what been shared via Twitter.
Speaker of the House Nancy Pelosi posted late on Monday, “It’s day 24 of the #TrumpShutdown. 800,000 Americans are losing paychecks. The health & safety of countless more are in jeopardy.”
And Trump retorted on the social media platform on Tuesday morning, “Why is Nancy Pelosi getting paid when people who are working are not?”