As the partial shutdown of the Federal Government has negatively impacted New Jersey residents employed by or contracted to the federal government, New Jersey’s Commissioner of the Department of Banking and Insurance (Department) has encouraged those regulated by the Department, including insurers, banks, credit unions, mortgage lenders and brokers, consumer lenders, insurance producers, real estate brokers, and any other person or entity subject to licensure or regulation by this Department, to take into consideration the difficulties residents have endured and will continue to endure until the current shutdown has ended, and those affected begin to receive regular payments and have been reimbursed for monies past due.

The Department specifically encourages the insurance and managed care-related entities and individuals it regulates to assist those affected by the current conditions by taking actions such as relaxing due dates for premium payments, extending grace periods, waiving late fees and penalties, allowing forbearance with regard to the cancellation/non-renewal of policies, allowing payment plans for premium payments, and exercising judicious efforts to assist affected policyholders and working with them to make sure that their insurance policies do not lapse.

Banking Division regulated entities/individuals have similarly been requested to relax due dates for loan and mortgage payments, extend grace periods, modify terms on existing loans, ease credit card limits, extend new credit, waive late fees and other fees, allow customers to defer or skip payments, and delay the submission of delinquency notices to credit bureaus.

The Commissioner’s requests are memorialized in her first regulatory bulletin issued to the regulated marketplace in 2019. See Bulletin 19-01 (January 17, 2019) linked here

Across the river, in New York City, it has been estimated that the federal government shutdown has cost federal workers in New York $114 million in lost wages and other benefits. Staffers at agencies like the Department of Homeland Security and Social Security Administration, which have operations at 26 Federal Plaza in Civic Center, have been working without pay for several weeks now. “At 26 days, this is the longest shutdown in the government's history. More than 450,000 federal workers across the U.S. have done nearly $3 billion in unpaid work so far, and approximately 300,000 government workers deemed ‘non-essential’ have been furloughed, meaning that they are not permitted to work and haven’t received the $2 billion and counting that they have lost to the impasse.” See Crain’s New York Business linked here

The CFPB and the federal banking agencies – the FDIC, The Federal Reserve Bank, and OCC – remain open during the government shutdown as their funding does not come from congressional appropriations. However, the shutdown has resulted in the closing of the FTC.

Also closed during the shutdown are many HUD operations and activities. Certain lending-related operations will continue during the shutdown such as the endorsement of FHA-insured loans (with the exception of Home Equity Conversion Mortgages and Title I loans) and Ginnie Mae will continue to operate. Other federal lending programs impacted by the shutdown include those administered by the Small Business Administration which is closed during the shutdown.

Though New York’s Superintendent of Insurance Maria Vullo has not yet taken formal action to seek support for federal workers from her regulated entities, the New York Times reports that a “makeshift national safety net, stitched together by private businesses, banks, local governments, organized labor and charitable organizations, is spreading slowly and unevenly across the United States as the longest federal shutdown in history staggers to its one-month mark.”  Let’s hope New York businesses and state officials rise to the occasion.

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