Sen. Hirono Requests Information about Credit Protections for Those Impacted by Shutdown

Sen. Mazie K. Hirono (D-Hawai‘i) wrote to the executives of the three national credit bureaus—Equifax, Experian North America and TransUnion—requesting information about what steps have been taken to protect the creditworthiness of federal employees and contractors impacted by the government shutdown.

Sen. Hirono urged the companies to consider the unique circumstances of the government shutdown when considering actions that could negatively impact these workers’ credit scores.

“Your organization produces and maintains consumer credit information on millions of Americans every year, which are used to determine borrowers’ creditworthiness,” Sen. Hirono wrote. “A negative credit report can impact an individual’s ability to purchase homes or automobiles and their continued employment may be contingent on a positive credit report. Given the important role your organization plays in producing this information, I respectfully request information on the steps you are taking to identify and provide assistance for federal employees and government contractors who were impacted by the shutdown, and the financial institutions that serve these workers. Additionally, I also urge you to consider the unique circumstances of the government shutdown and take all appropriate actions to preserve the creditworthiness of those workers who may have been affected.”

In January, federal employees from the Bureau of Prisons (BOP) at the Federal Detention Center Honolulu (FDC Honolulu) contacted Senator Hirono to express their concerns about the impact of the government shutdown on their credit. The BOP was among several agencies that required federal workers like prison guards, food inspectors, weather service forecasters, air traffic controllers, transportation security officers, and many others to work during the shutdown without pay to protect the health and safety of our communities.

During the shutdown, many workers who were not eligible for unemployment insurance exhausted their savings and were on the brink of missing their next mortgage payment and other expenses that could negatively impact their creditworthiness, even as they receive back pay for their work. Currently, employees at the BOP are required to maintain good credit throughout the duration of their employment with the agency, and while many lenders in Hawaii stepped up to provide financial relief for workers who were impacted by the shutdown, not all could promise that missed payments would not be reported to the credit bureaus.

Throughout and following the shutdown, Senator Hirono stood with union members and called on Congress to pass legislation that she and 22 of her colleagues introduced that would secure back pay for the federal contractor employees impacted by the government shutdown. She also joined several of her colleagues to send a bipartisan letter to Margaret M. Weichert, the Acting Director of the U.S. Office of Personnel Management (OPM), to urge the Trump Administration and OPM to provide back pay for federal workers as soon as possible following the conclusion of the shutdown. Currently government contractors, particularly those in low-wage occupations, are not guaranteed back pay for the time they were furloughed.

The full text of the letter is available here and below:

Dear Mr. Begor, Mr. Boundy, and Mr. Peck:

I am writing to request information about whether your organization intends to take, or has already taken, any actions to protect the creditworthiness of federal workers and government contractors impacted by the recent federal government shutdown.

The recent government shutdown began on December 22, 2018 and lasted a record 35 days—impacting more than 800,000 federal employees, and numerous government contractors. During the shutdown many of these workers contacted me to express their concerns about how the shutdown would impact their creditworthiness. These included federal employees like those at the Federal Detention Center Honolulu (FDC Honolulu), who dutifully reported to work with the added stress of their financial well-being and that of their families. Food inspectors, weather service forecasters, air traffic controllers, transportation security officers, and other employees and contractors, who were denied paychecks due to circumstances beyond their control, demonstrated their commitment to keeping our commerce flowing and our communities healthy and safe.

The unfortunate reality is that far too many families in Hawaii and elsewhere live paycheck to paycheck, and, as this shutdown has made painfully clear, even the temporary loss of income can force workers to exhaust their savings and make hard choices about which bills to pay and expenses to prioritize. Workers who chose to pay for basic living expenses and necessities like food, electricity, child care, and gas (to get to work) over other expenses like mortgage payments, credit card bills, and car payments now face the prospect of diminished creditworthiness—again, due to circumstances beyond their control.

While many lenders stepped up during the shutdown to provide financial relief for workers who were impacted, with banks and credit unions in Hawaii offering mortgage forbearance and other relief options for many workers, not all institutions may have been able to promise that missed payments would not be reported to credit bureaus. In addition, some impacted workers may not have been aware of these efforts or may have failed to appropriately notify their lenders. As a result, even as federal employees receive back pay following the shutdown, some who missed payments during the shutdown could see lasting negative impacts that may affect their creditworthiness, and thus their livelihoods, through no fault of their own. Furthermore, government contractors, particularly those in low-wage occupations, are not guaranteed back pay for the time they were furloughed, meaning that not only were they denied critical income, but they now also face the prospect of getting even further behind in paying their financial obligations.

Your organization produces and maintains consumer credit information on millions of Americans every year, which are used to determine borrowers’ creditworthiness. A negative credit report can impact an individual’s ability to purchase homes or automobiles and their continued employment may be contingent on a positive credit report.

Given the important role your organization plays in producing this information, I respectfully request information on the steps you are taking to identify and provide assistance for federal employees and government contractors who were impacted by the shutdown, and the financial institutions that serve these workers. Additionally, I also urge you to consider the unique circumstances of the government shutdown and take all appropriate actions to preserve the creditworthiness of those workers who may have been affected.

Thank you for your consideration of these concerns. I look forward to hearing from you.

Sincerely,