When the government shuts down, federal workers and contractors stop getting paychecks, which creates real hardship for millions of people trying to pay their bills and mortgages. This bill tells the major financial regulators—like the Federal Reserve and FDIC—to work together and tell banks and credit unions how to help during these shutdowns. Specifically, banks are encouraged to be flexible with customers who are struggling because of the shutdown. This means they should be willing to modify loan terms, offer extensions, or provide new credit to help people and businesses get through the tough period. The regulators also want banks to avoid damaging people's credit scores during a shutdown, since the financial hardship isn't the customer's fault. The idea is that banks should recognize this is a temporary crisis and work with their customers rather than penalizing them for missing payments during a government shutdown. After each shutdown ends, the regulators have to report back on whether this guidance actually helped and make improvements if needed. The regulators also have to send out a public notice to banks, businesses, and consumers whenever a shutdown happens, making sure everyone knows what help is available.

Shutdown Guidance for Financial Institutions Act

Van Hollen, Chris

Shutdown Guidance for Financial Institutions Act This bill directs financial regulators—including the Federal Reserve Board, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration—to jointly issue guidance relating to a government shutdown.Specifically, financial regulators must issue guidance encouraging financial institutions to<ul><li>work with consumers and businesses affected by a shutdown,</li><li>recognize that consumers and businesses affected by a shutdown may lose access to credit and face temporary hardship in making payments on debts,</li><li>consider efforts to modify terms on existing loans or extend new credit to assist consumers and businesses affected by a shutdown, and</li><li>take steps to prevent adverse credit information from being reported in a manner that harms consumers affected by a shutdown.</li></ul>In addition, financial regulators must jointly issue a press release to notify financial institutions, consumers, and businesses&nbsp;of this guidance in the event of a government shutdown.Financial regulators must also complete a report after a government shutdown regarding the guidance's effectiveness and update the guidance if any shortcoming are identified in the report.&nbsp;