The longest government shutdown in US history is also a historic opportunity for banks, fintechs and bank challengers to show they’re serious about helping customers.
Financial industry collection organizations should follow the lead of the Department of Veterans Affairs, which is offering veterans with debt to the VA a suspension of collection activity for up to 90 days. FIs can make an even more flexible range of options available to their customers employed by the federal government. And while the proportion of federal employees in a company’s portfolio may be small, the press coverage around the shutdown makes this a disproportionately large opportunity to get the message across—to all current and prospective customers—that the bank is committed to helping them maintain good credit and capable of doing it in a timely and flexible manner.
Many furloughed customers could benefit, for example, from a temporary payment holiday along with a freeze on interest charges and any fees associated with the account. Others, especially those in two-income households, might prefer the option of changing a current payment plan to align with the payroll schedule of a second earner. Still others may want to continue with their current payment schedule, and banks can provide an incentive to make this option attractive.
Identifying the affected customers and reaching out to them with appropriate offers via email, SMS or mobile app is not a time-consuming labor-intensive project. The process—including assessing the impact on the FI’s own finances—is simple and fast. Banks using modern debt management software can do it in a day.
Who’s going to be among the first to act? Get step-by-step instructions on the FICO Community.