Help for Clients of Certain Banks After Shutdown

With the government shutdown causing havoc for government workers, there is at least some relief as a number of banks have promised help through consumer assistance programs. With 800,000 workers expected to work with no pay or be furloughed, the battle between President Trump and Congress over the border wall rages on.

For these federal workers, day-to-day survival has become a difficult task with incoming bills and other expenditure requirements. Following from the help offered by the US Office of Personnel Management, Wells Fargo has suggested a reversal of overdraft fees for those affected by the shutdown. Additionally, forbearance and payment assistance programs could be available for loan, mortgage, and credit customers.

Alongside Wells Fargo, Bank of America has offered its own support. Although the extent of the support very much depends on the circumstances of the individual, help could include loan modifications and fee waivers.

Consumer Support

For customers of Wells Fargo, Bank of America, Citi, and Chase (JPMorgan Chase & Co), the easiest way to see if you’re eligible for support would be to dial their number. Chase has encouraged all customers to dial a newly-created care line (1-888-356-0023), and Citi has promised assistance for those facing hardship. Even if it’s a simple waiving of fees, this is better than receiving no help at all.

Financial Advice

If you’re a federal worker and have some concerns over your financial situation in the coming weeks and months, we have some simple advice for you here today!

Draw a Simple Budget – Whenever the word ‘budget’ is used, people think of spending hours drawing up spreadsheets and using advanced budgeting programs on the internet. In truth, all you have to do is write down your main expenses on a piece of paper. Instantly, it’ll be easy to differentiate between the ‘necessary’ expenses and the ‘luxury’ expenses.

While on this note, there’s nothing wrong with contacting your federal agency and asking them directly what resources they have for help and whether you’re going to be furloughed. Also, many federal credit unions are helping workers in the short-term by providing furlough relief loans.

For anybody with mortgages, student loans, and other debts, don’t bury your head in the sand. Instead, pick up the phone and update them to your financial situation. With many agencies, they offer employees help when contacting landlords and creditors for relief.

Emergency Cash – For many Certified Financial Planners (CFPs), they recommend keeping cash stored somewhere for emergencies; typically this is enough for at least three months of expenditure. Unfortunately, research suggests only 47% of Americans have emergency savings for three months so you might be looking for other sources of cash. If this is the case, 0% interest rates can be found with a line of credit or furlough loan from a federal credit union.

Even though this interest rate is likely to increase after 60 days, it’s much better than a credit card which can charge upwards of 17%. Alternatively, a home equity line of credit (HELOC) can offer interest of 5.64%, but the interest isn’t deductible for taxes because you won’t be using the money for home improvements.

Sources to Avoid – To finish, we should explain the three sources of cash to avoid; credit cards, margin loans, and your retirement plan. While the first two lead to excessive charges and difficulty in maintaining a minimum balance, the latter could be treated as a permanent loan, and therefore bringing tax into the equation, if you can’t afford to reimburse your plan within a certain time limit.

Conclusion

If you belong to one of the banks mentioned above, why not contact them today to see what help they offer?