WASHINGTON With the federal government now shut down, many government services and agencies are closed, suspended or otherwise impacted.
For the credit union community's chief regulator, however, it's still business as usual.
NCUA's status as an independent agency - funded by credit unions, not through the federal government's budget process - means examinations will be conducted on time. Most NCUA examiners work out of their homes, the agency said, and staff will be available for inquiries and assistance.
That is what happened during the last protracted government shutdown in 1995, when the agency worked through. NCUA has navigated brief government shutdowns several times since then, too. The agency's Alexandria offices are owned by NCUA and its adjunct regional offices are leased and would not be affected by a shutdown, according to the agency.
Here is a guide to what CUs need to know about other government agencies that are impacted:
- FHA and SBA loans will stop.
- CUs that make government-guaranteed mortgage or small-business loans will feel the impact of the shutdown immediately.
- The U.S. Small Business Administration and the Federal Housing Administration will largely stop processing loan applications if the government is closed, resulting in potential backlogs at CUs that originate the loans.
The SBA said in its 36-page shutdown plan that it will shutter all of its loan programs except one that makes direct loans to home and business owners affected by natural or man-made disasters. In its two main programs, 7(a) and 504, the SBA provided guarantees on more than 55,000 loans last year totaling more than $30 billion in fiscal year 2012 and was on pace to approve similar volumes in fiscal year 2013. The SBA said nearly 2,200 of its employees, or 62% of its workforce, will be furloughed.
Complicating matters is that several new SBA rules take effect Tuesday, the start of the new fiscal year, including one that will eliminate fees on all SBA loans of less than $150,000. Business owners that waited to apply for the loans to avoid the guarantee fee will have their applications put on hold until the shutdown ends.
The FHA, meanwhile, will be unable to underwrite and approve new loans, according to a report from the Department of Housing and Urban Development, which oversees the agency. However, Ginnie Mae, which guarantees timely payments to investors in government-insured mortgage-backed securities, will continue operating. Fannie Mae and Freddie Mac also will also be largely unaffected.
For the most part, HUD will maintain minimum operations during a shutdown. As a result, FHA lenders cannot be assigned case numbers for new loans and they take some risk in closing loans since they do not know when the government will reopen. A loan has to be submitted to FHA within 60 days of closing to receive insurance.
