Congress moving ahead on credit protection for feds
- By FederalSoup Staff
- Nov 22, 2019
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.