The effort urges financial industry regulators to issue guidance encouraging financial institutions to work with federal employees and small businesses impacted by a government shutdown
Senator Warnock continues to fight for the rights of federal workers
The economic cost of a shutdown affects federal workers in every Congressional District in America, meaning that local economies will be harmed by federal worker furloughs
Washington, D.C. –– Today, U.S. Senators Raphael Warnock (D-GA), Chris Van Hollen (D-MD), and Angela Alsobrooks (D-MD) were joined by several of their colleagues in leading an effort to the heads of the federal financial regulatory agencies calling on them to immediately issue such guidance as federal workers, contractors, and small businesses face the prospect of struggling to make ends meet due to a crisis that was not of their doing.
In the letter that Senators Warnock, Van Hollen, and Alsobrooks and Congressman Mfume sent today with 20 of their Congressional colleagues, the lawmakers called on the federal financial regulators to immediately take the steps that would be required under the legislation, noting that similar actions were taken during past shutdowns and financial institutions need clear regulatory assurance to act swiftly. The letter was sent to Federal Deposit Insurance Corporation (FDIC) Acting Chair Travis Hill, Federal Reserve System Vice Chair Michelle Bowman, Comptroller of the Currency Jonathan Gould, National Credit Union Administration Chair Kyle Hauptman, Russell Vought in his capacity as acting director of the Consumer Financial Protection Bureau (CFPB), and Conference of State Bank Supervisors Chair Tony Salazar.
“We urge you to issue updated guidance encouraging your regulated institutions to work with individuals and small businesses impacted by the government shutdown,” the lawmakers wrote. “We hope that financial institutions will recognize the temporary hardship caused by unexpected gaps in pay and respond by taking steps to prevent adverse information from being reported in a manner that harms consumers affected by a shutdown.”
“These actions would mirror steps financial regulators made in past shutdowns,” the lawmakers continued. “However, since the last shutdown in 2019, the financial system has faced increased stress due to interest rate risk, and the bank failures in 2023 have highlighted a stronger need for focused, concerted balance sheet management. As institutions may be reluctant to take proactive steps to assist customers, it is critical that joint guidance be issued to reduce uncertainty and empower institutions to provide flexibility to federal employees and servicemembers while mitigating any clear risk factors.”
“We will make every effort to reopen the government quickly. In the meantime, we urge you to work with financial institutions to reduce burdens on federal employees and servicemembers who experience a lapse in pay through no fault of their own,” the lawmakers concluded.
Senator Warnock is a champion for federal workers, recognizing that they are critical to the fabric of our democracy. In May 2025, Senator Warnock questioned the unjust firings of thousands of Centers for Disease Control and Prevention (CDC) employees and promised robust oversight. He has also rallied with fired CDC workers and held then Department of Human and Health Services Secretary Nominee Kennedy accountable for his dangerous rhetoric about the centers.
Joining Senator Warnock and Congressman Mfume in signing the letter were Senators Chris Van Hollen (D-MD), Angela Alsobrooks (D-MD), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Mark Warner (D-VA), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Tim Kaine (D-VA), Elizabeth Warren (D-MA), and Cory Booker (D-NJ); and U.S. RepresentativesSuhas Subramanyam (D-VA-10), Jerry Nadler (D-NY-12), Eleanor Holmes Norton (D-D.C.), Don Beyer (D-VA-8), Dwight Evans (D-PA-3), Rashida Tlaib (D-MI-12), Gabe Amo (D-RI-1), Sarah Elfreth (D-MD-3), Glenn Ivey (D-MD-4), April McClain Delaney (D-MD-6), Johnny Olszewski (D-MD-2), and James Walkinshaw (D-VA-11).
Read the full text of the letter HERE or below:
Dear Acting Chairman Hill, Vice Chair Bowman, Comptroller Gould, Chairman Hauptman, Acting Director Vought, and Chair Salazar:
As Americans across the country face the consequences of a government shutdown, we write to you to address concerns about how this may impact our nation’s government employees, and how this can be addressed through your oversight. While federal law mandates that federal employees and the military receive back pay when the government reopens, the lapse in pay creates serious challenges for families. We hope that you will encourage and support banks and credit unions in efforts to provide flexible financial arrangements for their customers who endure temporary financial hardship due to a government shutdown beyond their control.
This government shutdown will cause pay interruptions for millions of federal employees, servicemembers, and federal contractors. Unexpected income shocks are a key driver of penalty fees, such as credit card late fees, overdraft fees, and minimum balance fees. Customers facing a temporary income shock could easily fall below the standard minimum balance required to uphold the terms of free checking accounts, triggering account maintenance and penalty fees.
Unexpected fees further strain government employees and servicemembers already struggling to cope with not being paid through no fault of these employees. Expenses continue even as income is halted, forcing even the most financially responsible federal employees and servicemembers to use savings to cover short-term expenses. Federal employees and servicemembers may be forced to utilize credit to make ends meet, adding to the concerningly high level of consumer credit card debt held nationwide. The monthly cost of holding credit card balances has increased as Annual Percentage Rates (APRs) have risen in tandem with the Federal Funds Rate, causing the overall cost of credit to rise significantly for those who use it. This will compound the harm that Americans are feeling right now from rising inflation fueled by tariffs, a declining labor market, and the possibility of healthcare becoming increasingly unaffordable – efforts that we are fighting for in our work to fund the government.
We urge you to issue updated guidance encouraging your regulated institutions to work with individuals and small businesses impacted by the government shutdown. We hope that financial institutions will recognize the temporary hardship caused by unexpected gaps in pay and respond by taking steps to prevent adverse information from being reported in a manner that harms consumers affected by a shutdown. Institutions can proactively work with customers to provide modified credit arrangements in order to prevent derogatory information from being reported to consumer reporting agencies. We ask that you work with, and encourage, your regulated institutions to provide flexible alternatives to financial arrangements that put their customers in a temporarily compromising financial position, recognizing that this is temporary and not reflective of the customer’s true risk profile. Institutions that work with their customers to provide flexible financing arrangements and place loans in forbearance need reassurance that these actions will be taken into consideration in supervisory practices. We ask that you consider encouraging banks and credit unions to temporarily waive minimum balance, overdraft fees, and late fees for any individual or small business impacted by the shutdown.
These actions would mirror steps financial regulators made in past shutdowns. However, since the last shutdown in 2019, the financial system has faced increased stress due to interest rate risk, and the bank failures in 2023 have highlighted a stronger need for focused, concerted balance sheet management. As institutions may be reluctant to take proactive steps to assist customers, it is critical that joint guidance be issued to reduce uncertainty and empower institutions to provide flexibility to federal employees and servicemembers while mitigating any clear risk factors.
The economic cost of a shutdown is not isolated to just workers in the District of Columbia and surrounding regions. Data from the Census Bureau and the Office of Personnel Management demonstrates that federal workers reside in every Congressional District in America, meaning that local economies across the country will be harmed by federal worker furloughs.
We will make every effort to reopen the government quickly. In the meantime, we urge you to work with financial institutions to reduce burdens on federal employees and servicemembers who experience a lapse in pay through no fault of their own.
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