Thoughts from Karen Neeley
IBAT General Counsel and Senior Attorney with Kennedy Sutherland, LLP.
Unless you have been in a coma, you are aware that the federal government ran out of funding and now significant agencies are shut down. However, the federal banking regulators are funded outside of the budget process and should be operating as normal. On the other hand, SBA is shuttered as is USDA. This impacts lending activities through them. The SEC will have to furlough employees. IRS and FinCEN are affected, although the OCC (another part of Treasury) is not. Tax transcripts will not be available from IRS. Here is a link to a helpful letter for Sellers from Fannie Mae. The Social Security Administration is affected, but social security and disability checks will still go out and Medicare will be paid.
Bank customers who are furloughed federal employees will not be paid. Essential personnel will continue to work (to protect our borders and as prison guards as well as other critical functions), but they aren’t being paid. In past shutdowns, Congress has authorized back pay. However, there is no guarantee that this will be the case this time. Meanwhile, banks have customers with loan payments and living expenses that won’t wait. Consider setting up a small loan program to assist during this period as well as a loan modification procedure.
Flood Insurance Update - "As of this evening, all NFIP insurers have been directed to resume normal operations immediately and advised that the program will be considered operational since December 21, 2018, without interruption," FEMA said in a statement posted to the agency's website.