With the federal government shut down since Saturday morning, several agencies are closing all but essential operations. Federal banking regulators — the Consumer Financial Protection Bureau, FDIC, Federal Reserve and OCC — will remain open as their funding does not come from congressional spending. Federal lending programs will be curtailed; the Small Business Administration is only processing disaster-related loans, and the Federal Housing Administration has placed limits on origination of new single-family FHA-backed mortgages.
The Securities and Exchange Commission will use funds carried over to “remain open for a limited number of days.” Due to tax filing season, more IRS operations will continue than normal during a shutdown. The Financial Crimes Enforcement Network will continue to process industry anti-money laundering filings. For more information, visit individual agency and department websites.
The authority of the Federal Emergency Management Agency to issue flood insurance policies under the National Flood Insurance Program has now lapsed. FEMA issued guidance last month to write-your-own insurers about how to proceed with operations in the event of a shutdown. This, along with guidance issued by the banking agencies during the 2010 NFIP lapse, may be useful to lenders for property subject to the mandatory flood insurance purchase requirement.
Banks of all sizes have already begun working with affected customers — principally federal employees and contractors, who will not be paid during a shutdown — to waive fees or provide other accommodations. The American Bankers Association urges all banks to continue working with federal employees and other individuals and businesses affected by the shutdown.
Editor’s note: On Monday, Jan. 22, Congress approved a three-week extension of government funding, ending the shutdown upon the president’s signature.