Bill Summary
The "Shutdown Guidance for Financial Institutions Act" is a proposed piece of legislation aimed at providing support to consumers and businesses adversely affected by federal government shutdowns. Key provisions of the bill include:
1. **Definition of Affected Parties**: The bill defines "consumers affected by a shutdown" as federal employees who are furloughed or not receiving pay, as well as federal contractors experiencing significant income reductions during a shutdown.
2. **Guidance Issuance**: Within 180 days of the bill's enactment, federal financial regulators (such as the Federal Reserve and the FDIC) are required to issue guidance encouraging financial institutions to assist affected consumers and businesses. This includes recognizing their financial hardships, modifying loan terms, extending credit, and preventing negative credit reporting.
3. **Immediate Notification**: Regulators must notify financial institutions and the public about the guidance within 24 hours of a shutdown's onset.
4. **Post-Shutdown Reporting**: After a shutdown ends, regulators are tasked with submitting a report to Congress within 90 days analyzing the guidance's effectiveness and updating it if necessary within an additional 180 days.
Overall, the legislation seeks to mitigate the economic impact of government shutdowns on individuals and businesses by promoting proactive measures from financial institutions.
Possible Impacts
Here are three examples of how the "Shutdown Guidance for Financial Institutions Act" could affect people:
1. **Financial Relief for Federal Employees**: Federal employees who are furloughed or not receiving pay during a government shutdown may face immediate financial hardship. This legislation encourages financial institutions to work with these individuals by potentially modifying loan terms or offering new credit options. As a result, affected employees may find it easier to manage their debts, such as mortgages or car loans, mitigating the stress of financial instability during the shutdown.
2. **Support for Federal Contractors and Businesses**: Federal contractors and businesses that experience a substantial reduction in income due to a government shutdown can also benefit from this legislation. Financial institutions are encouraged to consider prudent modifications to existing loans or to extend new credit to these businesses. This support could help ensure that these businesses remain operational, preserving jobs and services that could otherwise be lost during the shutdown.
3. **Protection of Credit Scores**: The legislation allows for the possibility of preventing adverse information from being reported on the credit histories of consumers affected by the shutdown. This means that if financial institutions work with individuals to modify loan terms or provide temporary relief, such arrangements would not negatively impact the consumers' credit scores. This protection can help maintain the creditworthiness of affected individuals, ensuring they have better access to credit in the future once the shutdown is resolved.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2995 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 2995
To require the Federal financial regulators to issue guidance
encouraging financial institutions to work with consumers and
businesses affected by a Federal Government shutdown, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 9, 2025
Mr. Van Hollen (for himself, Ms. Alsobrooks, Mr. Kaine, Mr. Warner,
Mrs. Gillibrand, Mr. Booker, and Mr. Merkley) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To require the Federal financial regulators to issue guidance
encouraging financial institutions to work with consumers and
businesses affected by a Federal Government shutdown, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Shutdown Guidance for Financial
Institutions Act''.
SEC. 2. SHUTDOWN GUIDANCE FOR FINANCIAL INSTITUTIONS.
(a) Definitions.--In this section:
(1) Consumer affected by a shutdown.--The term ``consumer
affected by a shutdown'' means an individual who is an employee
of--
(A) the Federal Government, and who is furloughed
or excepted from a furlough during a shutdown;
(B) the District of Columbia, and who is not
receiving pay because of a shutdown; or
(C) a Federal contractor or other business, and who
has experienced a substantial reduction in pay due to
the shutdown.
(2) Consumers and businesses affected by a shutdown.--The
term ``consumers and businesses affected by a shutdown''
means--
(A) a consumer affected by a shutdown; and
(B) a Federal contractor (as defined under section
7101 of title 41, United States Code) or other business
that has experienced a substantial reduction in income
due to the shutdown.
(3) Federal contractor.--The term ``Federal contractor''
has the meaning given the term ``contractor'' in section 7101
of title 41, United States Code.
(4) Federal financial regulators.--The term ``Federal
financial regulators'' means the Board of Governors of the
Federal Reserve System, the Bureau of Consumer Financial
Protection, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, and the National Credit Union
Administration.
(5) Shutdown.--The term ``shutdown'' means any period in
which there is more than a 24-hour lapse in appropriations as a
result of a failure to enact a regular appropriations bill or
continuing resolution.
(b) Guidance.--Not later than the end of the 180-day period
beginning on the date of enactment of this Act, the Federal financial
regulators jointly, in consultation with State banking regulators and
other appropriate Federal and State agencies, shall issue shutdown
guidance to the financial institutions they regulate encouraging the
financial institutions to--
(1) work with consumers and businesses affected by a
shutdown;
(2) recognize that consumers and businesses affected by a
shutdown may lose access to credit and face temporary hardship
in making payments on debts such as mortgages, student loans,
car loans, business loans, or credit cards;
(3) consider prudent efforts to modify terms on existing
loans or extend new credit to help consumers and businesses
affected by a shutdown, consistent with safe-and-sound lending
practices; and
(4) take steps to prevent adverse information being
reported in a manner that harms consumers affected by a
shutdown, including by preventing modified credit arrangements
intended to help consumers fulfill their financial obligations
from being reported to, and coded by, consumer reporting
agencies on a consumer report in a manner that hurts the
creditworthiness of the consumer.
(c) Notice of Guidance During a Shutdown.--Not later than the end
of the 24-hour period beginning at the start of a shutdown, the Federal
financial regulators jointly shall issue a press release to alert
financial institutions, consumers, and businesses to the existence and
content of the guidance issued under to subsection (b).
(d) Post-Shutdown Report to Congress and Updated Guidance.--
(1) In general.--Not later than the end of the 90-day
period beginning on the date on which a shutdown ends, the
Federal financial regulators jointly shall submit to Congress a
report that contains an analysis of the effectiveness of the
guidance issued pursuant to subsection (b).
(2) Updated guidance.--Not later than the end of the 180-
day period beginning on the date on which a report is issued
under paragraph (1), the Federal financial regulators shall
update the guidance required under subsection (b) if any
shortcomings are identified in the report.
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