Democratic lawmakers are calling on financial institutions to give federal workers a break on their bills.
Lawmakers didn’t reach a deal that would reopen the government this weekend or raise the debt ceiling, but 30 House Democrats are signed on to a resolution urging banks and other financial institutions to be flexible with customers who are government employees and may be experiencing financial hardship because of the partial shutdown of the U.S. government.
The resolution calls for organizations to identify federal workers in their customer base and take initiatives such as temporarily waiving or reducing late payment penalties, a move that lawmakers hope will help workers protect their credit standings.
The effort is led by California’s Rep. Maxine Waters and Maryland’s Reps. Steny Hoyer and Chris Van Hollen.
“The shutdown of the Federal Government has forced thousands of people into financial distress through no fault of their own,” said Waters, ranking member of the House Financial Services Committee. “Financial institutions should not penalize – or profit from – those affected by these difficult circumstances.”
The resolution follows five financial organizations that last Wednesday urged financial institutions to work with federal employees affected by the shutdown.
“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,” the groups said in an Oct. 9 news release.
The groups are: the Board of Governors of the Federal Reserve System; Consumer Financial Protection Bureau; Federal Deposit Insurance Corporation; National Credit Union Administration and the Office of the Comptroller of the Currency.
“I commend those financial institutions that already are offering payment flexibility for those who were furloughed earlier in the year as a result of the painful cuts of sequestration, and I encourage all banks, credit unions, and related financial institutions to pursue similar arrangements as a result of this current situation,” said Rep. Gerald E. Connolly of Virginia.
About 800,000 federal workers were sent home nearly two weeks ago with no guarantee they would be paid for the forced time off. Others, deemed excepted workers, were required to work while their pay was delayed until after the government resumes full operations.
Since then 350,000 furloughed civilian Department of Defense workers have been called back to work after President Obama signed a bill that required active members of the military continue receiving pay during the government crisis. Secretary of Defense Chuck Hagel then summoned the civilian workers back to support military operations.
A few other agencies have also recalled workers. The Central Intelligence Agency called back thousands because of national security concerns, and the Centers for Disease Control and Prevention called back nearly a dozen employees to deal with an outbreak of Salmonella.
But more than 400,000 remain off the job. The House passed legislation supporting furloughed employees ultimately be paid, but the Senate has yet to do so. President Obama has said he would sign such a bill if it reaches his desk.