Lawmakers Move to Protect Federal Employees' Credit Ratings During Shutdowns
Measures would block shutdown-related credit downgrades and encourage financial institutions to be lenient with federal employees during appropriations lapses.
A House panel on Friday advanced legislation that would block credit agencies from downgrading the ratings of federal employees, contractors and other consumers seriously impacted by a government shutdown.
The Protecting Innocent Consumers Affected by a Shutdown Act (H.R. 4328), introduced by House Financial Services Committee Chairwoman Rep. Maxine Waters, D-Calif., would prevent credit agencies from making rating changes based on “adverse items of information” for people impacted by a lapse in appropriations.
The bill would set up a database of federal employees, and would allow federal contractors, D.C. employees and members of the public to “self-certify” that a shutdown has caused a substantial loss of income. It would prohibit credit agencies from downgrading the credit score of anyone in the database from the beginning of a lapse in appropriations until 90 days after government reopens.
The Financial Services Committee voted 32-22 to advance the bill to the House floor Friday. During a hearing on Wednesday, Republicans expressed concerns with the security of the database, as well as the fact that non-federal workers can self-certify that they have been impacted by a shutdown.
“I believe this bill will have unintended consequences for the consumers affected,” said Rep. Patrick McHenry, R-N.C., ranking member of the committee. “[I] have a real problem with sending federal employees’ names to the credit agencies. We know of a recent breach of one of the large credit agencies, and we just had hearing where there was broad agreement that these companies operate as an oligopoly. The goal is a laudable one, but the way the bill goes about doing it is quite troublesome.”
Waters noted that the credit agencies already have much of the information in question, and indicated that she would be willing to work with lawmakers potentially to add an opt-out clause to the bill before final passage.
“We need an efficient way of protecting these employees,” Waters said. “[Understand] that we expect [credit agencies] to step up to the plate and to be very generous in the way that we deal with them. This goes for all of the financial institutions and all of the credit bureaus, and I would ask my colleagues not to get into a position where you think you’re helping the federal employees, but in fact you’re not willing to go the last mile for them.”
The bill will go to the full House for consideration.
The House on Thursday passed by a voice vote another bill aiming to protect federal workers during shutdowns, the Shutdown Guidance for Financial Institutions Act (H.R. 2290), introduced by Rep. Jennifer Wexton, D-Va.
Wexton's bill would require financial regulators to issue shutdown guidance within 24 hours of a shutdown’s commencement encouraging financial institutions to work with customers impacted by a lapse in appropriations. During the 35-day partial government shutdown that began last December, financial regulators did not issue such guidance until the 20th day of the lapse.
“Missing a paycheck is a hardship for many families, but missing two can be devastating,” Wexton said in a statement. “And that’s exactly what too many of my constituents were forced to endure during the last government shutdown . . . With just a few legislative days left for Congress to take action before yet another government shutdown, this bill helps ensure that our federal workers and contractors are not punished for a shutdown they didn’t cause.”
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