IOWA NEWSPAPER ASSOCIATION
How the Government Shutdown Affects Bank Customers
JOHNSTON, IOWA (Oct. 4, 2013) - The government shutdown has raised a few questions about what it may mean for individual consumers. How will it impact the ability to access their money and other banking services? Is the Federal Deposit Insurance Corporation (FDIC) insurance still effective and in place?
While banks are regulated by the government, banks are not government entities and therefore are largely not impacted by a government shutdown. Here's what consumers need to know:
* Access to your money. Yes, you will continue to have access to your money. ATMs will continue to work, and your bank will still be open during its regular business hours.
* Deposits are safe. Your money is safe. The FDIC will continue to insure your deposits up to $250,000. Remember: your bank buys this insurance. It is not taxpayer money and, thus, is not affected by the appropriations process in Congress.
* Social Security and Medicare payments will continue. Both are funded by payroll taxes, and those payments will continue during the shutdown, however long it may last.
* Most loans are still available. Banks will continue to provide loan products, including mortgage loans sold by government entities. There may be some delays in closing loans if a particular loan involves paperwork required by the federal government, but most loans will still be available.
* Some government-guarantee loans may be unavailable. There's a lot of confusion out there, but the Farm Service Agency (part of the Department of Agriculture), the Federal Housing Administration and the Small Business Administration will continue to process loans, but at a reduced rate. As a result this may create a backlog and could keep banks from offering consumers these particular products.
* Banks will continue to be regulated. Federal banking regulators - the Federal Reserve, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the FDIC - are all open and will remain open because they are not subject to the federal budget. Banks pay for those federal banking examinations.
Iowa bankers will continue to work with their customers as they always have, and they will be ready to answer any questions or concerns raised by their customers about how they may be impacted by the shutdown. Most customers and bank services will not be affected by this national event.
About the Iowa Bankers Association
The Iowa Bankers Association represents 341 Iowa banks and savings institutions. Iowa bankers are committed to the Iowa values of honesty, hard work and community service, and have been a trusted resource for Iowans for more than 100 years. Iowa banks offer FDIC insurance and lend more than $43 billion to help individuals, business owners and agriculture. Nearly 15,000 Iowans work at an Iowa bank, and Iowa banks donate more than $35 million and 874,000 volunteer hours to support local communities each year. To learn more about Iowa banks, visit MyIowaBank.com.
(Contact: John Sorensen, President & CEO, (515) 286-4313; email@example.com)