Regulation

Regulators urge lenders to work with furloughed workers during shutdown

126px-US-FederalReserveSystem-Seal.svg_3Regulators encouraged financial institutions earlier this week to work with American consumers impacted by the shutdown of the federal government.

The Federal Reserve, OCC, CFPB, FDIC and National Credit Union Administration urged the institutions to work out arrangements “consistent with safe-and-sound lending practices” that, in the long term, are beneficial to both the borrower and lender.

At the time of government shutdown nearly two weeks ago, each government agency was required to determine which employees were “non-essential”—approximately 800,000 employees were furloughed, NPR reports.

Many federal employees received their last paychecks for the near future on Friday for less than half of the usual amount. The pay period will be split into two parts: six days of pay and four days of no compensation, according to NBC Washington.

Different agencies have different paydays based on the payroll provider. Employees paid through funding other than appropriations will not see a pay lapse, but many other employees expecting checks on Friday will receive a smaller-than-usual amount.

Regulators said in their announcement that federal workers may face temporary financial hardship and trouble making payments on mortgages, loans and credit cards, and that financial institutions should realize the impact of the shutdown is transitory.

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