As Federal Shutdown Continues, Financial Regulators Seek to Address Related ImpactsWith no immediate end in sight to the current federal shutdown, financial regulators are seeking to minimize the adverse impacts of the shutdown on individuals. In a January 11, 2019, press release, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and other regulators issued a joint press release wherein the agencies acknowledged that “affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards.” While the agencies suggested that these effects “should be temporary,” they “encourage[d]” the regulatory community to “consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers.” The agencies specifically opined that “[p]rudent 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.” Perhaps most importantly, the agencies offered an olive branch to a regulated community that might be reticent to take the agencies’ advice and pursue strategies to address borrower issues and financial exigencies caused by the shutdown: “Such efforts should not be subject to examiner criticism.” As the shutdown continues, regulators and Congress may continue to intervene in the ordinary operations of the financial system to assist impacted employees and families who find themselves facing unexpected financial difficulties. Additionally, the financial services industry should consider developing standardized processes and strategies to address shutdown-related hardship requests submitted by borrowers and also monitor closely legislative and regulatory activities to see what additional measures may be considered as the shutdown remains in place.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of David Roth David Roth

David Roth has a diverse practice that includes banking and financial services, as well as environmental and energy law. Since joining the firm almost 25 years ago, his practice and experiences have expanded to include a wide variety of corporate, litigation, financial services…

David Roth has a diverse practice that includes banking and financial services, as well as environmental and energy law. Since joining the firm almost 25 years ago, his practice and experiences have expanded to include a wide variety of corporate, litigation, financial services, and environmental matters. He has closed asset purchases, conducted corporate due diligence, and served as de facto general counsel for a manufacturing company. He has met with company presidents, maintenance supervisors, and CFOs to learn how they run their businesses. All of this has helped him better understand the full range of pressures businesses face and the importance of ensuring that legal solutions actually work on a practical level.

Photo of J. David Stewart III J. David Stewart III

David Stewart regularly represents clients before the executive and legislative branches in Washington, D.C., and Montgomery, Alabama, and also advises clients on federal and state campaign finance, lobbying and ethics laws. He got his start in politics working in the United States Senate…

David Stewart regularly represents clients before the executive and legislative branches in Washington, D.C., and Montgomery, Alabama, and also advises clients on federal and state campaign finance, lobbying and ethics laws. He got his start in politics working in the United States Senate in Washington, D.C. before attending the University of Virginia Law School. After graduating from law school in 2000, David returned home to Birmingham to join Bradley’s Governmental Affairs Practice Group.