Shutdown Guidance for Financial Institutions Act
- Bill Number
- H.R. 5689
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-10-03: Referred to the Committee on Financial Services, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-04-07T08:05:42Z
AI-Generated Summary
Purpose
The Shutdown Guidance for Financial Institutions Act (H.R. 5689) aims to support individuals and businesses harmed by federal government shutdowns—periods when Congress fails to pass funding bills, leading to temporary closures of non-essential government operations—by requiring federal financial regulators to guide banks and other lenders in offering flexible financial relief.
Key Provisions
- Issuance of Guidance: Within 180 days of the bill's enactment, federal financial regulators (including the Federal Reserve, Consumer Financial Protection Bureau, Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration) must jointly issue guidance, in consultation with state regulators. This guidance encourages financial institutions to:
- Collaborate with affected consumers and businesses.
- Acknowledge potential hardships, such as lost access to credit or difficulty paying debts like mortgages, student loans, auto loans, business loans, or credit cards.
- Prudently adjust existing loan terms or provide new credit, while maintaining safe lending practices (e.g., avoiding undue risk to the institution).
- Avoid reporting helpful loan modifications to credit agencies in ways that damage the borrower's credit score.
- During a Shutdown: Regulators must issue a joint press release within 24 hours of a shutdown starting, notifying financial institutions, consumers, and businesses about the guidance.
- Post-Shutdown Reporting and Updates: Within 90 days after a shutdown ends, regulators must submit a joint report to Congress analyzing the guidance's effectiveness. If issues are found, they must update the guidance within 180 days of the report.
- Definitions:
- Affected Consumers: Federal employees who are furloughed (temporarily laid off without pay) or excepted (working without pay), District of Columbia employees unpaid due to the shutdown, or federal contractors (businesses with government contracts) or other workers facing major pay cuts.
- Affected Businesses: Federal contractors or other entities with significant income loss from the shutdown.
- Shutdown: Any lapse in federal funding lasting more than 24 hours due to failure to pass appropriations bills or continuing resolutions (temporary funding extensions).
Significant Changes to Existing Law
This bill introduces a new mandatory requirement for federal regulators to create and distribute specific guidance on handling shutdown-related financial hardships. Previously, no such standardized, joint guidance existed, though regulators could issue voluntary advice during crises. It also mandates timely notifications, reporting to Congress, and potential updates, creating ongoing oversight not previously required by law.
Potential Impacts
- On Citizens: Provides relief for government workers, contractors, and related businesses by encouraging lenders to offer payment flexibility, potentially preventing credit damage, foreclosures, or bankruptcies during shutdowns. This could reduce financial stress for millions affected by past shutdowns (e.g., the 2018–2019 event impacted over 800,000 workers).
- On Businesses: Helps federal contractors and dependent small businesses maintain cash flow through loan adjustments, mitigating broader economic ripple effects like delayed payments or reduced operations.
- On Government Agencies: Increases workload for regulators to develop guidance, issue alerts, and report to Congress, but without new funding (budgetary effects are handled under the Statutory Pay-As-You-Go Act of 2010, which requires offsetting costs). No direct impact on international relations, as it focuses on domestic financial policy.
Main Stakeholders Affected
- Federal Financial Regulators: Primary implementers, responsible for guidance, notifications, and reporting.
- Financial Institutions: Banks, credit unions, and lenders encouraged (but not forced) to adopt flexible practices.
- Consumers and Employees: Furloughed federal workers, unpaid District of Columbia staff, and federal contractors facing income loss.
- Businesses: Government contractors and others reliant on federal funding or operations.
- Congress: Receives reports and oversees updates, potentially influencing future budget negotiations to avoid shutdowns.
Notable Legal, Constitutional, or Political Implications
- Legal: The bill promotes consumer protection without mandating specific actions by lenders, respecting their autonomy under existing safe lending laws (e.g., avoiding conflicts with federal banking regulations). It defines terms clearly to ensure consistent application.
- Constitutional: No direct challenges; it operates within Congress's authority over federal spending and regulation of interstate commerce (via financial systems). It indirectly addresses shutdowns, a byproduct of the Constitution's appropriations clause (Article I, Section 9), without altering shutdown mechanics.
- Political: By formalizing support for shutdown victims, the bill could pressure lawmakers to resolve funding disputes faster, reducing political leverage from shutdown threats. It highlights bipartisan concern over shutdowns' economic costs, as evidenced by cosponsors from both parties, but may face debate over regulatory burdens on private institutions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Subramanyam, Suhas [D-VA-10]
Cosponsors (21)
Rep. Beyer, Donald S. [D-VA-8], Rep. Horsford, Steven [D-NV-4], Rep. Lieu, Ted [D-CA-36], Rep. McClain Delaney, April [D-MD-6], Rep. McClellan, Jennifer L. [D-VA-4], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Raskin, Jamie [D-MD-8], Rep. Walkinshaw, James R. [D-VA-11], Rep. Carson, André [D-IN-7], Rep. Beatty, Joyce [D-OH-3], Rep. Mfume, Kweisi [D-MD-7], Rep. Amo, Gabe [D-RI-1], Rep. Mannion, John W. [D-NY-22], Rescom. Hernández, Pablo Jose [D-PR-At Large], Rep. Randall, Emily [D-WA-6], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Watson Coleman, Bonnie [D-NJ-12], Rep. Fletcher, Lizzie [D-TX-7], Rep. Keating, William R. [D-MA-9], Rep. Titus, Dina [D-NV-1], Rep. Salinas, Andrea [D-OR-6]
Recent Actions
- 2025-10-03: Referred to the Committee on Financial Services, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-10-03: Referred to the Committee on Financial Services, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-10-03: Introduced in House
- 2025-10-03: Introduced in House
Bill Versions
- Shutdown Guidance for Financial Institutions Act — issued 2025-10-03 — PDF (5 pages)