Lawmakers urged financial institutions to work proactively with borrowers facing financial distress because of the government shutdown. For three weeks, federal employees have been out of the job without pay.
As the nation enters day 15 of the federal freeze, many government employees are beginning to feel the early signs of financial hardship.
Rep. Maxine Waters, D-Calif, spearheaded a concurrent resolution, along with 30 other policymakers, urging institutions such as banks and consumer reporting agencies to work with customers affected by the shutdown.
"The shutdown of the federal government has forced thousands of people into financial distress through no fault of their own,” Waters said. "Financial institutions should not penalize — or profit from — those affected by these difficult circumstances."
The proposal calls on institutions to identify customers affected by the government halt and asks the entities to adopt flexible arrangements to help borrowers meet debt obligations.
For instance, the resolution urges institutions to consider temporarily waiving or reducing penalties for last payments.
On a similar note, the resolution warns that federal employees experiencing financial stress should not be impaired because of the shutdown.
"Every day, I am hearing from federal workers from across my district about the financial hardships they are facing due to this government shutdown," stated Congresswoman Donna F. Edwards, D-MD.
She added, "For federal workers who have experienced three years of a pay freeze, and sequestration that forced many to take unpaid furloughs earlier this year, they should not be penalized now by their financial institutions due to circumstances beyond their control."
Mega bank Citigroup (C) is aware that customers are facing real hardship.
In times of need, Citi aims to help our customers find solutions based on their specific circumstances,” said Citigroup spokesperson Andrew Brent.
He continued, "Since the shutdown began, we have worked with our mortgage customers and other customers that are impacted to do what we can to address their unique and specific needs, and we will continue to do so. As always, we encourage all customers that need our help to contact us through Citi Customer Service."
HousingWire reached out to the other major lenders and has yet to receive feedback on their plans.
Until the political fight ends, lawmakers are calling for entities to work with customers experiencing short-term financial distress during a government shutdown.
“It makes sense for everyone financially and is the right thing to do,” Congressman Chris Van Hollen, D-Mass., concluded.
