NCUA, CFPB Open Despite Partial Government Shutdown

The partial government shutdown has had no direct impact on the operations of the NCUA or the CFPB because neither agency is funded through the appropriations process.

However, recognizing that many credit union members could be affected by the lapse in government funding, NCUA officials are urging credit unions to be flexible in providing for their members’ financial needs.

The agency also warned credit unions with branches on federal property that access to those branches could be limited.

Congressional leaders and President Trump are at an impasse in their negotiations to fund parts of the federal governments, causing some agencies to shut down or limit their activities and only provide essential services.

Trump was scheduled to meet with congressional leaders over the dispute, which centers on whether Congress will appropriate funds for a wall along the U.S.’s southern border.

Congress has passed funding for defense, education, labor, health and human services programs, so those programs are not directly affected by the shutdown.

The NCUA is funded through fees paid by credit unions and the CFPB is funded through the Federal Reserve Board. Efforts to subject both agencies to the annual appropriations process have failed.

Ironically, House Republicans did include the CFPB proposal in their version of the FY19 bill funding many financial services programs. That bill is among the measures that Congress has not passed and Senate appropriators have made it clear they will not accept such policy riders on appropriations bills.

The NCUA has also urged credit unions to “prudently” work with affected members, including providing advances to members who normally receive direct deposits from the federal government.

The agency also said credit unions should be aware that some federal programs they participate in could be affected.

And the agency referred credit unions to a letter then-Chairman Debbie Matz sent to credit unions in 2011.

“Working constructively with credit union borrowers who may experience financial difficulty as a result of any shutdown is in the long-term best interest of both the credit union and the member,” Matz wrote at the time.

She urged credit unions to offer special programs for members affected by a government shutdown.

During the long New Year’s weekend, there was some confusion over whether the Federal Emergency Management Agency would issue new policies under the National Flood Insurance Program.

Initially, FEMA announced that as a result in the lapse of funding, the agency would not be able to issue new policies – a move that could have had a drastic impact on potential homebuyers.

This came as a surprise to some lawmakers, since Congress had just reauthorized the NFIP program through the end of May.

“Despite this clear directive from Congress, FEMA has announced that it will not issue or renew NFIP policies during the government shutdown,” Rep. Maxine Waters (D-Calif.), the incoming chair of the House Financial Services Committee, said following the announcement.

FEMA quickly changed course and said the program will operate without interruption.