Banks are feeling effects of shutdown: ABA
WASHINGTON—The American Bankers Association called for an end to the government shutdown Friday, reporting that its members have felt the effects in their local communities.
So far, the shutdown has prevented customers from securing mortgage approvals and small- business loans and threatens to cause even more harm to communities the longer it lasts, the organization said in a statement.
"With the partial government shutdown continuing to impact federal employees and everyday citizens around the country, we urge the administration and Congress to end the standoff before it does any more damage to the economy, federal employees and everyday citizens,” said Rob Nichols, the president and chief executive of the ABA.
Until the government reopens, banks can offer assistance to affected customers in the form of fee waivers, loan modifications and payment deadline extensions, the group said.
The partial government shutdown has created backlogs and delays at several different agencies responsible for processing loans, including the Small Business Administration and the Federal Housing Administration. At the Department of Agriculture, single-family loan processing has stopped entirely.
Experts say these backlogs are likely to persist even after the shutdown ends, as agency staff will be working with an increased volume of loans.
House Financial Services Chair Maxine Waters, D-Calif., also called for an end to the government shutdown this week, claiming that millions of households that rely on the Department of Housing and Urban Development’s rental assistance programs are close to losing their homes due to projected lapses in funding.