Regulators urge banks to go easy on those hit by shutdown

Hundreds of thousands of government employees have been out of work for more than a week, creating the potential for temporary financial strain, according to guidance issued Wednesday by five agencies with jurisdiction over the financial sector. 

“Affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, credit cards, and other debt,” the regulators said in a joint statement.  

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“The agencies encourage financial institutions to consider prudent workout arrangements that increase the potential for creditworthy borrowers to meet their obligations,” they said. 

The Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration and the Consumer Financial Protection Bureau said such arrangements are in the best interest of lenders and the broader economy, in addition to the borrowers. 

The agencies emphasized that any “prudent” changes to the terms of existing loans should not warrant criticism of the banks by examiners. They urged borrowers affected by the shutdown to contact their banks if they are having trouble paying their loans.