[Congressional Record Volume 165, Number 151 (Thursday, September 19, 2019)]
[House]
[Pages H7805-H7807]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SHUTDOWN GUIDANCE FOR FINANCIAL INSTITUTIONS ACT
Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 2290) 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, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2290
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) Guidance.--Not later than the end of the 180-day period
beginning on the date of enactment of this Act, the Federal
financial regulators shall, jointly, in consultation with
State banking regulators and other appropriate Federal and
State agencies, 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's credit report in
a manner that hurts the creditworthiness of the consumer.
(b) 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 shall, jointly,
issue a press release to alert financial institutions,
consumers, and businesses to the existence, and content, of
the guidance issued pursuant to subsection (a).
(c) 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 a shutdown ends, the Federal
financial regulators shall, jointly, issue a report to
Congress containing an analysis of the effectiveness of the
guidance issued pursuant to subsection (a).
(2) Updated guidance.--Not later than the end of the 180-
day period beginning on the date a report is issued under
paragraph (1), the Federal financial regulators shall update
the guidance required under subsection (a) if any
shortcomings are identified in such report.
[[Page H7806]]
(d) Definitions.--In this section:
(1) Consumers affected by a shutdown.--The term ``consumers
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 the shutdown;
(B) the District of Columbia, and who is not receiving pay
because of the shutdown; or
(C) a Federal contractor (as defined under section 7101 of
title 41, United States Code) 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 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.
(4) 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.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Waters) and the gentleman from North Carolina (Mr.
McHenry) each will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in strong support of H.R. 2290, Shutdown
Guidance for Financial Institutions Act, a bill introduced by one of
our colleagues and a new member of the Financial Services Committee,
Representative Jennifer Wexton of Virginia.
Last December, President Trump shut the government down for an
unprecedented 35 days, resulting in missed paychecks for countless
government employees and contractors. About 800,000 Federal employees
were furloughed and another 4 million or so Federal contractors were
negatively affected.
The resulting damage was significant. Many of our constituents, who
did nothing wrong at all, found it hard to make essential payments--
such as payments on mortgages, rent, student loans, car loans, business
loans, or credit cards--when their income was temporarily limited.
Furthermore, the Congressional Budget Office estimated the shutdown
cost the American economy $11 billion and it delayed approximately $18
billion in Federal discretionary spending for compensation and
purchases of goods and services.
Should there be another government shutdown in the future, this bill
will help ensure that, at a minimum, there is timely guidance provided
by financial regulators to encourage financial firms to work with and
help affected consumers. Consistent with prudent lending practices,
firms would be encouraged to modify payment terms or extend credit,
when appropriate, and prevent adverse information from being reported
that might hurt a consumer's credit score.
During the October 2013 shutdown, regulators issued guidance to
financial institutions on day nine of the shutdown, urging financial
firms to do what they could to help affected consumers.
On January 11, 2019, financial regulators issued a joint statement to
provide guidance to financial institutions, again encouraging them to
help consumers affected by the shutdown. However, the guidance did not
come until the 20th day of the shutdown and only came after I wrote
regulators the day before prodding them to issue such critical
guidance.
This delay is unacceptable, whether it is 9 days or 20 days, and
there is no reason why regulators should not prepare the appropriate
guidance now and issue a press release within the first 24 hours of any
future shutdown to remind financial institutions to help affected
consumers, as H.R. 2290 would require.
Furthermore, H.R. 2290 builds on H. Res. 77 that I sponsored and was
passed by the House on a voice vote in January 2019, expressing the
sense of Congress that financial institutions and other entities should
proactively work to help consumers affected by any future government
shutdown.
Passing the Shutdown Guidance for Financial Institutions Act will
help ensure guidance is provided to financial firms in a timely manner
and that there is no ambiguity that struggling consumers affected by a
shutdown, through no fault of their own, get the assistance that they
need.
I commend the work of Representative Wexton on this very important
legislation. I support the bill, and I urge my colleagues to do the
same.
Madam Speaker, I reserve the balance of my time.
Mr. McHENRY. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I rise today in recognition of Federal employees
impacted by the government shutdown and express my support for Federal
regulators and financial institutions supporting consumers in need of
assistance in the event there is a lapse in Federal funding.
{time} 1645
We just passed a continuing resolution to keep the government open
earlier today. So the good news is, this fall does not look like storm
season for Federal employees, and, hopefully, the contents of this act
won't have to be used. I think that is a good thing. I think we can all
agree that is a good thing. On a bipartisan basis, we should agree that
it is a good thing.
Whether it is a missed credit card payment or an unexpected medical
expense, government shutdowns can leave Federal employees, contractors,
and other individuals facing economic hardship through no fault of
their own.
Madam Speaker, if you look at the government shutdowns under the
Carter administration, the Reagan administration, and the Clinton
administration, the lapse in funding impacted people's lives, and we
don't want Federal employees to be held hostage due to the inability of
Congress and the executive branch to come to terms on Federal funding.
H.R. 2290 requires Federal financial regulators to issue guidance
encouraging institutions to work with individuals impacted by a
government shutdown. It also requires the regulators to provide
Congress with a report analyzing the effectiveness of that guidance. It
is proper.
I remind my colleagues that guidance does not constitute a formal
rulemaking. Unlike a rule, guidance is nonbinding. This bill sets out
best practices for both regulators and financial institutions, and they
should take that guidance seriously.
I also want to reiterate that this legislation conveys no new
authority on Federal financial regulators. Let's make that clear. I
know that many financial institutions and financial regulators are
already implementing the best practices contemplated by this
legislation.
Six months or 7 months after the Federal Government shutdown, I think
we have already seen that the regulators have taken action.
Institutions have historically been cognizant of the needs of consumers
who find themselves in these types of unforeseen situations. In fact,
last fall, more than 100 banks took it upon themselves to offer loan
modifications, payment deadline extensions, payroll advances, or low-
or zero-interest rate loans, among other accommodations, to those
impacted by
[[Page H7807]]
the shutdown. Those are positive actions. We know that those positive
actions made a difference during that period of uncertainty.
Federal financial regulators have also played an important role in
ensuring fair treatment for consumers affected by a shutdown. In
January of this year, the FDIC, the OCC, the National Credit Union
Administration, the Federal Reserve, the CFPB, and the Conference of
State Bank Supervisors partnered to encourage institutions to work with
consumers who were negatively impacted. They took it upon themselves to
do that, and they had the authority to do so.
In a related financial institution letter, the FDIC encouraged all
supervised institutions to consider prudent arrangements that would
increase the potential for creditworthy borrowers to meet their
obligations.
While I agree with my colleagues across the aisle that we should
encourage banks to work proactively with consumers affected by a
shutdown, we must also encourage financial regulators to provide some
type of clarity as well. This bill ensures exactly that.
I think this bill is sufficient. It deals with the four walls of
governance and the data held within government, and I think it is a
good piece of legislation that codifies existing practices.
I encourage my colleagues to support this bill, and I reserve the
balance of my time.
Ms. WATERS. Madam Speaker, I yield 5 minutes to the gentlewoman from
Virginia (Ms. Wexton), a new member of the Financial Services
Committee.
Ms. WEXTON. Madam Speaker, I thank the gentlewoman for yielding.
Madam Speaker, I rise today in support of my bill, H.R. 2290, the
Shutdown Guidance for Financial Institutions Act.
This legislation would help protect Federal employees, government
contractors, and small business owners from some of the financial
hardships that arise from a government shutdown.
The shutdown that lasted from late December 2018 through January of
this year, the longest in our Nation's history, stretched 35 days and
cost the economy billions of dollars.
For more than a month, paychecks were put on hold for 800,000 Federal
employees and work-stop orders went on to Federal contractors,
resulting in tens of thousands of layoffs. Unlike Federal workers,
contractors did not receive backpay.
Thousands of families saw their lives upended. Missing one paycheck
is a hardship for many, but missing two can be devastating. Not only
were people struggling to make their rent or mortgage payments, some
had to rely on food pantries to feed their families or ration their
insulin because they could not afford the copay. This was through no
fault of their own.
During this time, a lot of companies stepped up with offers of
assistance for people impacted by the shutdowns, including banks and
credit unions that offered flexible payment options and no-interest
loans.
This was especially important for employees in the national security
community because financial difficulties can damage their credit scores
and put their security clearances and, therefore, their livelihoods at
risk.
While it is positive to see so many lenders taking proactive steps to
mitigate harm, there were still issues and confusion at some financial
institutions, and regulator guidance from the Federal Government was
slow to come. It was not until the 20th day of the shutdown that
financial regulators provided guidance, encouraging banks to work with
borrowers and account holders affected by the shutdown, and letting
banks know that such efforts would not be subject to examiner
criticism.
During the shutdown in 2013, it wasn't until the ninth day that
similar guidance was released. Let me give you an example of why this
matters. I want to read part of a letter that I received from a
desperate constituent in the middle of the last shutdown.
She wrote: ``My husband and I recently sold our home and put an offer
on another home in the area. . . . The mortgage financing for our new
home was all set before the government shutdown. Our closing date is
set for January 28, 2019, on the new house. Today, we learned that the
mortgage company is denying our mortgage application because I am
furloughed. They consider me unemployed and too much of a risk to
finance.''
Thankfully, my constituent and her lender were able to work through
this problem. The mortgage was eventually approved, but this never
should have happened in the first place.
My legislation would essentially automate the process of issuing
guidance by requiring Federal financial regulators to release guidance
within 24 hours of the start of a shutdown. It also includes reporting
requirements on the effectiveness of the guidance and requires
regulators to fix any shortcomings that are identified.
Madam Speaker, despite the uncertainty and the hardship of the last
few years, Federal workers have shown a steadfast commitment to
service. They serve in every congressional district in every State,
carrying out countless vital responsibilities on behalf of the American
people. They deserve way better than the way they have been treated.
I thank Chairwoman Waters and Ranking Member McHenry for ushering
this bill to the floor, and I urge my colleagues to support it.
Mr. McHENRY. Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
We should all work to make sure that there is never again a
government shutdown. However, if one occurs, this bill will ease the
burden on many vulnerable workers and families.
Once again, I commend the gentlewoman from Virginia for bringing this
legislation to the House, and I urge my colleagues to join me in
supporting this important piece of legislation.
Madam Speaker, I yield back the balance of my time.
Mr. McHENRY. Madam Speaker, I think this legislation puts to rest the
need for the Financial Services Committee to legislate around the
government shutdown. I am glad we were able to put that to rest, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Waters) that the House suspend the
rules and pass the bill, H.R. 2290, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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