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U.S. Regulators Urge Lenders to Help Workers Hit by Shutdown

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U.S. Regulators Urge Lenders to Help Workers Hit by Shutdown

Demonstrators arrive at a protest hosted by the National Air Traffic Controllers Association on Capitol Hill in Washington, D.C. on Jan. 10, 2019. Photographer: Alex Wroblewski/Bloomberg
Photographer: Alex Wroblewski/Bloomberg

The Federal Reserve and other government regulators have encouraged financial institutions to offer relief to consumers impacted by the partial U.S. government shutdown.

“Affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans or credit cards,” the agencies said in a statement Friday. “As they have in prior shutdowns, the agencies encourage financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers.”

The statement comes a day after House Financial Services Chair Maxine Waters wrote a letter to federal regulators calling on them to take steps to help protect workers hit by the shutdown. “It is in no one’s interest to punish affected consumers who may be enduring this temporary period of financial stress,” she wrote.

About 380,000 federal employees have been put on furlough since Dec. 22 across nine government departments and dozens of agencies, while 450,000 employees are working without pay. For many of them, Friday marked the first missed paycheck.

Regulators said efforts to alter loan terms were in the lenders’ best long-term interest and would “not be subject to examiner criticism.”

The agencies included the Fed, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors.

(Updates with Waters letter in third paragraph.)