Congress moving ahead on credit protection for feds

Congress has passed a short-term funding bill, averting a shutdown in November. But the danger remains of a shutdown, as early as next month.

And when shutdowns happen, money in the bank for federal families can get short—fast.

Thankfully, some lawmakers “get it”—and are pressing to protect federal employee credit and borrowing capacity, before the next funding standoff hits.

The Shutdown Guidance for Institutions Act—introduced by Sen. Chris Van Hollen (D-Md.)—provides companion legislation to efforts in the House by lawmakers determined to prevent negative credit reporting on feds as they face the danger of yet another shutdown.

Last winter’s record 35-day partial federal shutdown left more than 800,000 feds without their paycheck—not for just one pay period, but two. The resulting cash shortage left many feds unable to make credit card payments, mortgage payments, car payments, and a host of other financial obligations—and leaving many with bad marks on their credit.

“This bill is just common sense. If we face another Trump Shutdown, we must do everything we can to protect consumers, federal workers, contractors, and small businesses. Issuing this guidance promptly is a small way to do that, and I urge the Senate to consider this legislation without delay,” Sen. Van Hollen said in a release.

House legislation on the issue already passed in September.

If passed, the new law would require federal guidance be issued to financial institutions—enlisting their cooperation in not harming affected feds’ credit—within 24 hours of the outset of a shutdown. After the shutdown ends, the legislation require reporting on whether the guidance worked to protect feds—and that reporting would have to be released within 90 days.

Federal employee unions—including the National Treasury Employees Union and the American Federation of Government Employees—are backing the bill.

Reader comments

Fri, Dec 6, 2019

We're probably even looking at another shutdown. WHatver you want to call it. Trump shutdown or Congress shutdown. Doesn't look good in Washington.

Wed, Dec 4, 2019

Obviously the president didn't show great leadership. And he consistently said a shutdown was just great for him. "I am proud to shut down the government." That's what he said. Look it up.

Wed, Dec 4, 2019

It is ALL the elected idiots and minions responsible for the government shutdown that affects the lives of federal, contract employees along with the businesses they support through purchases. Now the best way to finish this stupid way of doing business in office is to vote all incumbents out of office; down grade their salaries and benefits by 80% and have defined term limits so we do not have career political idiots destroying this country. It goes for the do nothings such as Warren, Schumer, Pelosi, Cortez, Rubio, McConnel and all of their cronies. They should be ashamed of themselves but instead complain about their salaries and their $300.00 hair cuts. get real, grow up and make America great again, please leave office at the end of your terms since you can not accomplish anything. And do not worry about your credit ratings, you rodents still get paid during a shutdown.

Tue, Dec 3, 2019

For those saying: "president kept saying he didn't mind a shutdown." Of course he did. He had to call their bluff and entrap them in their own extortion. And for those not blinded by party and agenda, it showed how Congress IS the one at fault all the time, PERIOD, no matter what. Why? Because they're NOT doing their job to pass a budget like they're supposed to. And at times it seems to be on purpose. But the complicit media played their part as usual to give the appearance of wrong-doing only by their opposition as usual...

Tue, Dec 3, 2019

To "This wasn't ... " You wrote that the article insists that it was a trump shutdown. No it doesn't. The person quoted, a congressman, says that. Anyway, everyone knows that Congress and President Trump were involved in the shutdown. But you have to admit the president kept saying he didn't mind a shutdown. He said it many times before the shutdown. So for me I can forgive congressman van Hollen for calling it a Trump shutdown.

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Edward A. Zurndorfer Certified Financial Planner
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Mathew B. Tully Legal Analyst

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