BofA treating gov't. shutdown like natural disaster: CEO

• Key insight: The second-largest U.S. bank has been providing relief for federal employee customers since the start of the shutdown, CEO Brian Moynihan said.
  
• What's at stake: The shutdown has now reached 21 days, leaving many federal workers without regular paychecks, which can impact their ability to make payments.
  
• Expert quote: "We handle it just like any other storm or fire or whatever," Moynihan said.

Bank of America is supporting customers affected by the government shutdown in the same way it helps customers after a natural disaster, BofA CEO Brian Moynihan said Tuesday.

That means offering customer assistance programs, such as fee and payment waivers as well as loan deferrals and forbearance programs, to federal employees who are currently not receiving regular paychecks, Moynihan said during a question-and-answer session at the American Bankers Association's annual convention in Charlotte, North Carolina.

"We handle it just like any other storm or fire or whatever," Moynihan said. "We basically say, 'Look, what's important to you?'" No fees, waivers on payments, deferrals, forbearance, all those types of things, so that that customer can make it through this trough and get back on their feet."

The federal government has now been shut down for 21 days. The disruption started on Oct. 1, marking the first such closure since early 2019, which was the longest in history at 35 days.

Republicans and Democrats remain deadlocked over a spending bill that doesn't extend health care subsidies scheduled to expire at the end of this year. Most federal agencies have gone dark, and their workers have been furloughed.

During a shutdown, furloughed government workers do not get paid. After past shutdowns, Congress has generally provided back pay, but that money is not guaranteed, and it doesn't help furloughed workers to make ends meet in the short term.

Banks and credit unions have responded to the shutdown by rolling out relief programs to help their customers. The American Bankers Association is keeping a running list of support options by bank.

For instance, Hancock Whitney Corp. in Gulfport, Mississippi, has a loan program for furloughed government employees that provides loans up to $6,000 to help cover expenses. At TD Bank, affected customers can request refunds on fees including overdraft fees and monthly maintenance fees.

California Credit Union in Glendale, California, is offering penalty-free withdrawal from certificate accounts, among other programs.

At BofA, there's a playbook for such a scenario, Moynihan said Tuesday. Part of it is making sure certain federal government payments, such as Social Security checks, are processed, he said.

Read more about Bank of America here: https://www.americanbanker.com/organization/bank-of-america

"I like to think this is unusual, but we've gone through this," Moynihan said.

During the session, which lasted about 30 minutes, Moynihan also talked about the changing regulatory dynamics in Washington, D.C. The Trump administration has taken a deregulatory stance, which many bank leaders view favorably.

"The reaction to the financial crisis was appropriate, but it needed to stop at some point," Moynihan told ABA President and CEO Rob Nichols. "It just kept going and going … The wheels kept turning and you're saying, 'Wait, I thought we solved that problem.'"

Moynihan, who's led BofA since 2010, said it's hard to run a company when the regulatory pendulum swings back and forth and back between regulation and deregulation.

"So we just want it fair, down the middle, appropriate and then get it baked in because this is hard to adjust to," he said.