U.S. regulators urge banks to work with borrowers during shutdown
WASHINGTON (Reuters) - U.S. regulators on Wednesday urged banks to go easy on borrowers who are having trouble making payments on mortgages, student loans and other debt because of the federal government shutdown.
The government has been partially closed since funding ran out on October 1 and lawmakers failed to agree on a new budget deal. Safety workers and others deemed "essential" have been working without pay, while hundreds of thousands of others were sent home until their agencies re-open.
Some businesses that rely on revenue from tourists at national parks or that provide services to the government also are under strain as the closures drag into a second week.
Regulators including the Federal Reserve and the Consumer Financial Protection Bureau acknowledged that some of those employees may struggle to make payments and that banks should work with them to temporarily modify loan terms.
They said bank examiners would consider the unusual circumstances as they supervise lenders.
"Prudent 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," the bank regulators said in a statement.
The agencies, which also included the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp and the National Credit Union Administration, sometimes make similar statements after natural disasters such as hurricanes.
The regulators also encouraged federal workers and others affected by the shutdown to contact their banks if they anticipate being unable to make certain payments.
(Reporting by Emily Stephenson; Editing by Karey Van Hall and Bob Burgdorfer)
© Thomson Reuters 2017 All rights reserved.