Bank of America Supports Customers Affected by Government Shutdown
The second-largest U.S. bank, Bank of America, has been stepping up to support its federal employee customers affected by the government shutdown, according to CEO Brian Moynihan. In a recent question-and-answer session at the American Bankers Association’s annual convention in Charlotte, North Carolina, Moynihan shared how the bank is providing relief for its customers during these challenging times.
Providing Relief Similar to Natural Disaster Response
Bank of America’s approach to the government shutdown is similar to its response following a natural disaster. “We handle it just like any other storm or fire or whatever,” Moynihan said. The bank offers customer assistance programs, such as fee and payment waivers, loan deferrals, and forbearance programs. These are intended to help federal employees who are currently not receiving their regular paychecks due to the shutdown.
“We basically say, ‘Look, what’s important to you?'” Moynihan explained. The goal is to help customers navigate this difficult period and get back on their feet. These initiatives include no fees, waivers on payments, deferrals, and forbearance.
Impacts of the Government Shutdown
The federal government has been shut down for 21 days, the first such closure since the record-breaking 35-day shutdown in early 2019. This disruption has left many federal workers without their regular paychecks, impacting their ability to make payments and meet their financial obligations.
During a shutdown, furloughed government workers do not receive their pay. While Congress has typically provided back pay following past shutdowns, this compensation is not guaranteed and it doesn’t help furloughed workers in the short term.
Banking Sector Responds to the Crisis
In response to the shutdown, banks and credit unions have rolled out relief programs to support their customers. The American Bankers Association is keeping a running list of the support options provided by different banks.
Examples include Hancock Whitney Corp., which is offering loans of up to $6,000 to help cover expenses for furloughed government employees. TD Bank is allowing affected customers to request refunds on fees, including overdraft and monthly maintenance fees. California Credit Union is offering penalty-free withdrawal from certificate accounts, amongst other programs.
Bank of America’s Approach
According to Moynihan, Bank of America has a playbook for tackling such scenarios. This includes ensuring certain federal government payments, such as Social Security checks, are processed. Despite the challenges, Moynihan remains hopeful, “I like to think this is unusual, but we’ve gone through this,” he said.
Regulatory Dynamics
During the discussion, Moynihan also touched on the changing regulatory dynamics in Washington, D.C. He spoke about the Trump administration’s deregulatory stance, which many bank leaders view favorably. Moynihan emphasized the need for balance between regulation and deregulation, suggesting a fair, down-the-middle approach would be most beneficial for the banking sector.
Since taking the helm at Bank of America in 2010, Moynihan has navigated through various economic and regulatory changes. His experience underscores the bank’s commitment to its customers and its adaptability in the face of challenging circumstances.
Read more about Bank of America here.
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