With the federal government “shut down” for an undetermined amount of time, consumers are likely to have concerns about access to their money and other banking services. To assuage those concerns, the Indiana Bankers Association assures clients that bank deposits are safe and banks will continue to operate during normal business hours. ATMs are still open, and deposits remain insured by the Federal Deposit Insurance Corporation up to $250,000. According to an IBA press release, this insurance is unaffected by the shutdown because it is paid for by banks, not taxpayer money.
The press release also indicates that Social Security and Medicare payments will continue as well, as they are funded through payroll taxes and will continue throughout the duration of the shutdown. Most loans will also remain available, as both Fannie Mae and Freddie Mac are largely unaffected by the shutdown. Their operations are funded by fees charged to lenders, allowing loans to continue to be available to consumers. This same situation also applies to VA loans, though the release urges caution as the tax transcripts from the IRS, which may be required by some vendors to close loans, are not currently available.
Some government-guarantee loans may not be available, however, as the Farm Service Agency, Federal Housing Administration and Small Business Administration will continue to process loans, but at a significantly reduced rate. Consequently, it is likely that there will be a backlog that could keep banks from offering consumers these products.
Banks also remain regulated. The primary banking regulators — the Federal Reserve Board, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp.— are funded by the banks they regulate and therefore are not subject to the federal budget.
Throughout the shutdown, most customers and bank services will not be affected. In the meantime, Hoosiers may rest assured that the taxpaying Indiana banking community continues to offer uninterrupted service to consumers.