If Congress and President Trump do not reach agreement today on a spending bill, the federal government will begin partial shutdown procedures at midnight tonight. Several agencies will close all but essential operations. Odds of an agreement appeared slim last night after the House passed a Trump-favored bill that, unlike the Senate’s bill, included more funding for border security.
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. However, federal lending programs, including the Small Business Administration, Federal Housing Administration and USDA programs, will be curtailed. Others affected by the funding lapse include the Federal Emergency Management Agency, which will lose its authority to issue flood insurance policies under the National Flood Insurance Program. An updated online feature from the ABA Banking Journal examines what bankers should do to prepare themselves and their customers for such a lapse.
If the partial shutdown is protracted, banks can expect the regulatory agencies to issue statements urging them to work with affected customers — principally federal employees and contractors, who will not be paid during a shutdown — to waive fees or provide other accommodations.
