Regulators Encourage Institutions to Work with Borrowers Affected by Government Shutdown
Five federal regulatory agencies on October 9 jointly released a statement encouraging financial institutions to work with customers who have been affected by the partial federal government shutdown. The agencies are the Federal Reserve Board of Governors, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.
Workout arrangements that align with safe-and-sound lending practices are most often in the long-term interest of the financial institution, the borrower, and the economy, the Fed noted. Borrowers who work for shuttered federal agencies or those otherwise affected may have temporary trouble making payments on debts such as mortgages, student loans, car loans, and credit cards.
The financial regulatory agencies encourage financial institutions to consider arrangements that will help creditworthy borrowers meet their obligations. The agencies realize that the effects of the federal government shutdown on individuals should be temporary, and prudent efforts to modify terms on existing loans should not be subject to examiner criticism.
Those affected by the government shutdown are encouraged to contact their lenders immediately if they encounter financial difficulty.
October 18, 2013