What Assistance Are Banks Offering for Federal Workers During the Shutdown?

On Oct. 24, more than 1.4 million federal workers opened their bank accounts to a harsh reality.

It was their first full missed paycheck of the shutdown. And now, as the shutdown drags into its 34th day with no end in sight, uncertainty over when their next paycheck will arrive is growing more dire by the day.

In response, banks and credit unions across the country are offering emergency relief to furloughed and unpaid federal employees, including fee waivers, deferred loan payments, and zero-interest loans to help families cover essential expenses like rent, food, and gas.

In San Antonio, one family told News 9, “We would have been in trouble” without a zero-interest loan from USAA. Other major lenders, including Bank of America, Chase, TD Bank, Capital One, and BMO, have announced similar relief efforts.

It’s a critical lifeline for affected households but also a warning sign. If the shutdown stretches into December, up to 4.5 million paychecks could be delayed, costing workers nearly $21 billion in lost wages, and widening the gap for banks to plug.

Banks step in: USAA and Navy Federal lead the way

The financial strain of missed paychecks can be immediate. Military families stand to be hit hardest, as many live paycheck-to-paycheck on a single income, Delia Johnson, chief operating officer of the nonprofit Military Family Advisory Network told PBS. 

That's why two of the nation’s largest military-focused financial institutions, USAA and Navy Federal Credit Union, are offering specialized loans to affected families.

USAA is offering zero-interest, zero-fee loans equal to one net paycheck (from $500 to $6,000) for eligible members whose pay has been disrupted. Funds are typically issued within two business days, and members have 60 to 90 days to repay, split into two installments once pay resumes. If the shutdown continues, members can apply for a second loan. 

“These are unique, zero-interest, zero-fee loans built specifically to help people meet their essentials during this crisis,” said JJ Montanaro, a certified financial planner with USAA, in an interview with CBS. 

Similarly, Navy Federal Credit Union has relaunched its Paycheck Assistance Program, offering 0% APR loans up to $6,000 (and in some cases as high as $10,000) for federal employees, contractors, and service members whose pay has stopped. 

No credit check is required, and repayment is automatically deducted when pay resumes. During the record 35-day shutdown of 2018, the credit union issued $53 million in loans to 32,000 members, but demand is already significantly higher this time, according to Navy Federal.

For military families and spouses like Naomi Pyle in San Diego, these programs offer stability in the midst of disruption, and help ensure that critical needs aren’t put on hold just because a paycheck is. Pyle told CBS she used Navy Federal assistance to pay for her son’s therapy and daughter’s braces

Other lenders join in

However, USAA and Navy Federal Credit Union's relief programs are only available to current members. That leaves many federal employees—especially those outside the military community—without access to these lifelines.

But other banks are stepping in, albeit with more limited relief measures. Bank of America, Chase, TD Bank, Capital One, and BMO are offering a slew of solutions, ranging from fee waivers, payment deferrals, and temporary forbearance on mortgages, credit cards, and auto loans.

Some community and regional banks are also offering targeted relief. Redwood Credit Union, for example, has already issued $160,000 in zero-interest loans to 60 federal workers, with a 60-day repayment window. 

Mortgage and bill deferrals offer short-term relief

Mortgage payments are often the most daunting expense to face without a paycheck—typically the largest bill a household carries, and one with the steepest consequences. Miss too many, and the risk isn’t just late fees, it’s losing your home.

To help, some lenders are offering payment deferments to furloughed workers, pausing monthly bills without triggering late fees or foreclosure threats.

“I got a letter from my mortgage company saying I was approved for deferred payment and that they wouldn't take foreclosure action against me,” Jill Hornick, a Social Security Administration employee in Illinois who continues to work without pay, told CBS. 

Still, she worries about how long that relief will last: “Who knows how long my mortgage company will allow this to go on before they foreclose on my house.”

But while these programs offer breathing room in the short-term, they do little to provide the long-term clarity most families need to plan their lives. If the shutdown continues into December, workers may still face growing interest charges, deferred balances, and uncertainty about when regular billing will resume.

As one furloughed USDA employee told CBS News, the goal for now is simple: “Protect every penny, because we just don’t know what happens next.”

What workers should know

Federal workers in need of assistance should keep a few considerations in mind when looking for relief. For one, most assistance programs are limited to current customers, so instead of reaching out to USAA or Navy Credit Union, contact your personal bank first. Even if they aren’t widely advertising relief, they may be able to offer you tailored solutions based on your banking history. 

To help move the process along, have proof of your federal employment and furlough status handy when reaching out. Many of these programs are designed to offer fast relief, and the right documentation can help ensure funds are disbursed without delay.

Start planning for repayment immediately. Some programs automatically deduct repayments once government pay resumes. While this makes the repayment process simple, it can also be potentially risky if the shutdown stretches longer than expected.

As the shutdown continues, relief options are evolving in real time. Stay in contact with your bank and ask for status updates about any programs that could help you maintain financial stability until regular paychecks return.