Shutdown Guidance for Financial Institutions Act
This bill, the Shutdown Guidance for Financial Institutions Act, would require the nation’s major federal financial regulators (the Federal Reserve, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the FDIC, and the NCUA) to issue joint guidance within 180 days of enactment. The guidance would urge financial institutions to work with consumers and businesses affected by a federal government shutdown—recognizing that such individuals may face reduced access to credit and difficulties in paying debts. It also directs lenders to consider prudent loan term modifications or new credit extensions consistent with safe-and-sound lending practices, and to avoid reporting modified arrangements in a way that damages credit scores. In addition, the bill requires a 24-hour notice press release at the start of a shutdown, a post-shutdown congressional report assessing the guidance’s effectiveness, and a subsequent update to the guidance if problems are identified. In short, the bill aims to provide a standardized, regulator-backed push for compassionate, prudent lender treatment of those disproportionately affected by a shutdown, while creating accountability through Congress and ongoing updates.
Key Points
- 1Definition and scope: Establishes who counts as a “consumer affected by a shutdown” (federal employees on furlough or excepted, D.C. employees not receiving pay, and federal contractors with reduced pay) and who falls under “consumers and businesses affected by a shutdown” (the affected consumer plus federal contractors or other businesses with income losses).
- 2Required guidance: Within 180 days, the federal financial regulators must jointly issue guidance encouraging lenders to work with affected individuals and businesses, acknowledge hardship, consider prudent loan term modifications or new credit, and avoid adverse reporting that could hurt creditworthiness.
- 3Public notice: At the start of any shutdown, regulators must issue a press release within 24 hours to alert institutions, consumers, and businesses to the existence and content of the guidance.
- 4Post-shutdown accountability: Not later than 90 days after a shutdown ends, regulators must report to Congress on the guidance’s effectiveness; within 180 days after that report, they must update the guidance if shortcomings are identified.
- 5Safeguards on reporting: Guidance must emphasize safe-and-sound lending practices and prevent modified loan arrangements from being improperly reported to credit reporting agencies in a way that harms credit.