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house Bill H.R. 2290

Should the Feds Encourage Banks to Work With Customers Affected by a Gov't Shutdown to Avoid Undue Hardship?

Argument in favor

Although federal regulators have historically issued guidance encouraging financial institutions and banks to work with customers impacted by government shutdowns, they aren’t required to do so. This bill is needed to ensure that regulators continue this practice going forward in case of future government shutdowns.

jimK's Opinion
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09/19/2019
We need to prevent two-party political standoffs from using government shutdown as a weapon in their arsenals for tribal warfare. The biggest problem is political party control over members largely reinforced by the massive political funds available to leadership that can readily used against members who don’t toe the party line. We can solve oh so many problems by getting big money, dark money out of politics. Without party dominance of members there will be many more options open for consideration as the membership can individually and independently debate and deliberate collaborative solutions. Oh well, in the mean time we need to protect innocents damaged by two-party political shootouts.
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09/19/2019
Let’s NOT have any government shutdown.
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SneakyPete's Opinion
···
09/19/2019
I surely hope that this is not a forecast of a Democratic ploy to create a Governmental Shutdown leading up to the 2020 Presidential election. I wouldn’t doubt that, based on their current standing, that they would surely try having one....
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Argument opposed

Since federal regulators have historically issued guidance encouraging financial institutions and banks to work with customers impacted by government shutdowns, there’s no need for this bill to mandate that they do so.

NoHedges's Opinion
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09/19/2019
Missing the forest thru the trees again🤔 The government SHOULD NOT be allowed to shutdown. And ALL the elected officials responsible/involved in the shutdown need to be fined $1000 per day, in the event of a legislative failure that results shutdown. With an additional fine of $10,000 per day for elected officials with a net worth of 2.5 million or more.
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Bryan's Opinion
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09/16/2019
It's unfortunate that government shutdowns occur, and although I generally wish the banks would be sympathetic to those persons impacted - I think the pain that is experienced needs to be felt, so that pressure can be directed to those politicians responsible for failing to keep the government running. My biggest concern about passing legislation to force the banks hand is that it passes accountability to the bank industry to clean up something that should fall on the shoulders of the politicians. It may be a harsh position, but nothing will change on capital hill if legislation is passed to sweep it under the rug.
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Raymond 's Opinion
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09/19/2019
Quit passing the buck. Do YOUR DAM JOBS. You are ELECTED TO CONGRESS to form and CREATE and PASS A BUDGET. Or do you not remember what you are ELECTED FOR? CONGRESS is supposed to have the purse strings. You seem to only want to argue and obfuscate President Trump. That’s not YOUR JOB. Do YOUR DAM JOBS.
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What is House Bill H.R. 2290?

This bill — the Shutdown Guidance for Financial Institutions Act — would require federal financial regulators to issue a guidance that encourages banks and other financial institutions to work with consumers and businesses affected by a federal government shutdown to avoid undue financial hardship. This guidance would be provided to banks and other financial institutions no later than 24 hours after a shutdown starts. 

Specifically, this bill would require federal financial regulators, in consultation with state banking regulators and other appropriate federal and state agencies, to issue shutdown guidance encouraging the financial institutions they regulate to: 

  • Work with consumers and businesses affected by a shutdown;
  • Recognize that consumers and businesses affected by a shutdown may lose access to credit and face temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards;
  • Consider prudent efforts to modify terms on existing loans or extend new credit to help consumers and businesses affected by a shutdown, consistent with safe-and-sound lending practices; and
  • Take steps to prevent adverse information being reported and utilized in any manner that harms consumers affected by a shutdown, including by preventing modified credit arrangements intended to help consumers fulfill their financial obligations from being reported to, and coded by, consumer reporting agencies on a consumer’s credit report in a manner that hurts the creditworthiness of the consumer.

This bill would also require federal financial regulators to issue a joint report to Congress with an analysis of the effectiveness of the guidance issued and what steps financial institutions took during the shutdown no more than 90 days after a shutdown ends. 

Impact

Federal workers affected by a government shutdown; financial institutions; and credit reports of federal workers affected by a government shutdown.

Cost of House Bill H.R. 2290

A CBO cost estimate is unavailable.

More Information

In-DepthRep. Jennifer Wexton (D-VA) introduced this bill to require federal financial regulators to issue guidance encouraging banks and other financial institutions to work with consumers and businesses affected by a federal government shutdown

“I heard directly from one who was denied a mortgage due to a government shutdown she couldn’t control—and I knew there were many more stories like hers. Federal workers and contractors are expected to shoulder the financial burdens incurred from a government shutdown they can’t control or predict. I remain committed to doing everything in my power to prevent future government shutdowns, but given the actions of this administration and its disregard for  federal workers and contractors, I will continue to work to safeguard our federal workforce should a government shutdown occur.” 

Federal regulators have historically issued guidance to financial institutions encouraging them to work with federal employees affected by shutdowns. On January 11, 2019, the prudential regulators issued a joint statement providing guidance to financial institutions and encouraging them to help customers affected by the partial government shutdown. This guidance — issued on the twentieth day of the shutdown — was issued in response to a letter from Rep. Maxine Waters (D-CA) encouraging regulators to help customers affected by the shutdown. Similar guidance was issued on October 9, 2013, on the ninth day of that year’s government shutdown. 

A non-binding House resolution introduced by Rep. Maxine Waters (D-CA) expressing the House’s sense that financial institutions and other companies should work proactively with customers affected by the 35-day partial government shutdown passed the House by a voice vote on January 28, 2019.


Of NoteRep. Wexton drafted this bill in response to correspondence from a furloughed federal employee whose mortgage application was denied during the 35-day partial government shutdown because the lender wrongly considered her unemployed and too much of a risk to finance. 

Around 800,000 federal workers missed two paychecks during the partial government shutdown. Many workers turned to loans to make ends meet — either through credit unions or via big banks. Others used personal loans, payday loans, credit-card cash advances, and 401(k) loans.

Of the overall situation workers found themselves in, Vox wrote:

“It is true that some banks and credit unions have devised loans specifically for workers affected by the shutdown and are waiving charges such as overdraft fees and interest charges. But lenders are working with clients on a case-by-case basis, meaning not everyone is getting the same deal. And workers are being forced to take on debt that they wouldn’t have had to otherwise.”

Leisyka Parrott, a furloughed Bureau of Land Management employee, summarized her situation during the shutdown thusly:

“I have the luxury that friends have loaned me one paycheck. The thing is when you get back pay, all the fees that you incur by missing payments – you don’t get paid back for those. If you are late for a payment and have a $25 fee, the government doesn’t pay for that.”

During the shutdown, Bankrate reported that there were no protections for furloughed government employees with regard to derogatory credit marks that they might accumulate during a shutdown. Bankrate reported that the Fair Credit Reporting Act (FCRA), the chief federal law that regulates credit reporting, didn’t have any provisions to protect furloughed government employees’ credit reports. Thus, if a furloughed government employee fell behind on their payments, there’d be nothing to prevent that late payment from showing up on a future credit report for up to seven years.

Over 16,000 federal workers filed for 0% interest loans through the Navy Federal Credit Union during the shutdown, which allowed them to receive advances on missed paychecks in amounts from $250-6000. Various major banks, including Bank of America, Wells Fargo, and Citi, also offered special programs for federal workers. Verizon also waived its late fees and agent assistance fees for federal workers.

Generally, one 30-day late payment shouldn’t cause lasting damage to credit scores, unless it’s part of a persistent pattern. A 60-day late payment would likely do more damage, and a 90-day late payment could hurt credit scores for seven years.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / Kameleon007)

AKA

Shutdown Guidance for Financial Institutions Act

Official Title

To require the Federal financial regulators to issue guidance encouraging financial institutions to work with consumers and businesses affected by a Federal Government shutdown, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house has not voted
      house Committees
      Committee on Financial Services
    IntroducedApril 10th, 2019
    We need to prevent two-party political standoffs from using government shutdown as a weapon in their arsenals for tribal warfare. The biggest problem is political party control over members largely reinforced by the massive political funds available to leadership that can readily used against members who don’t toe the party line. We can solve oh so many problems by getting big money, dark money out of politics. Without party dominance of members there will be many more options open for consideration as the membership can individually and independently debate and deliberate collaborative solutions. Oh well, in the mean time we need to protect innocents damaged by two-party political shootouts.
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    How about stopping shutdowns altogether?
    Like (16)
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    Let’s NOT have any government shutdown.
    Like (28)
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    I surely hope that this is not a forecast of a Democratic ploy to create a Governmental Shutdown leading up to the 2020 Presidential election. I wouldn’t doubt that, based on their current standing, that they would surely try having one....
    Like (18)
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    Missing the forest thru the trees again🤔 The government SHOULD NOT be allowed to shutdown. And ALL the elected officials responsible/involved in the shutdown need to be fined $1000 per day, in the event of a legislative failure that results shutdown. With an additional fine of $10,000 per day for elected officials with a net worth of 2.5 million or more.
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    AFTER ALL "WE THE PEOPLE" WERE FORCED TO BAIL OUT THE BANKS, NOW THEY SHOULD BE FORCED TO BAIL OUT "WE THE PEOPLE."
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    This kind of legislation is just beating around the bush and does very little to solve the actual problem. If Congress can’t agree on a budget, the previous budget adjusted for inflation should automatically come into force so that a government shutdown will never happen again!
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    Of course, people want to pay their debts, it's the banks that wants to claim their property and sell it for more profit. Think of Mnuchin and the widows he evicted over a measly quarter.
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    Federal shutdowns are the direct result of childish, petty politicians and the current president who cannot reach any compromises due to their bloated egos. These dysfunctional arrogant people get paid regardless of the devastation they cause to government employees who are helpless to do anything.
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    This bill would ensure bank support for those financially affected by a government shutdown. US taxpayers have bailed out banks in difficulty, banks should return the favor.
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    Sure, except this time instead of bailing out banks how about bailing out human beings? The last time the banks made out like bandits, which my gosh they ARE, and consumers paid for it.
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    Why not have Congress do their job and get their laws and budgets in place so they don't have to shut down the government.
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    I agree with JimK’s comments. However as a Fed Employee affected by both parties multiple shutdowns I only had help once. Bravo Zulu (Job Well Done) to the Navy Federal Credit Union (NFCU)! The NFCU model should be the gold standard; https://www.navyfederal.org/pdf/press-releases/2018/navy-federal-extends-paycheck-relief-to-those-affected-by-government-shutdown.pdf
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    It's unfortunate that government shutdowns occur, and although I generally wish the banks would be sympathetic to those persons impacted - I think the pain that is experienced needs to be felt, so that pressure can be directed to those politicians responsible for failing to keep the government running. My biggest concern about passing legislation to force the banks hand is that it passes accountability to the bank industry to clean up something that should fall on the shoulders of the politicians. It may be a harsh position, but nothing will change on capital hill if legislation is passed to sweep it under the rug.
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    WE bailed out the Banks. They now need to help their customers who through out no fault of their own { except perhaps voting for Trump] went with out pay d/t the shut down.
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    This bill could go away if you passed a budget
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    But there never should be a government shutdown.
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    Quit passing the buck. Do YOUR DAM JOBS. You are ELECTED TO CONGRESS to form and CREATE and PASS A BUDGET. Or do you not remember what you are ELECTED FOR? CONGRESS is supposed to have the purse strings. You seem to only want to argue and obfuscate President Trump. That’s not YOUR JOB. Do YOUR DAM JOBS.
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    The bill actually needs to be amended to specify that all debt needs to be suspended for any government workers affected by the government shutdown for the duration of the shutdown and for two weeks after the shutdown is concluded. This will prevent undue hardship to affected government workers and other Citizens who receive government checks (retirees and veterans, etc.)
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    Yes, encourage financial institutions to work with those affected by a government shutdown. But better yet, QUIT HAVING SHUTDOWNS in the first place. Do the job I am paying you to do and PASS THE DARN BUDGET! Compromise like the grownups you allegedly are supposed to be as public SERVANTS. This isn’t an unavoidable natural disaster that you don’t see coming, this is a known responsibility on a regular schedule. Those who are reduced to using shutdown tactics need to go back to kindergarten as do those who are creating the situation by being unwilling to work together.
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