The news: The federal government has been shut down for over two weeks as funding bills keep hitting roadblocks in the Senate, and it could take weeks to resolve. Some financial institutions have responded quickly, while others have been slow or off the mark.

More on this: The shutdown could last for days—or weeks—to come. The government last shut down in December 2018, and it took 34 days to restore funding. In light of this, loyalty-minded financial institutions are problem solving:

• USAA announced ahead of the shutdown that it would extend no-interest loans of up to $6,000 to affected members.
• Navy Federal Credit Union announced what it calls a “Paycheck Assistance Program.”
• ROGER, a Citizens Bank of Edmond brand, is offering short-term, interest-free loans of up to $7,500 and some fee waivers.

A long list of credit unions—such as PenFed, Congressional FCU, Senate FCU, and State Department FCU—are advertising solutions. This is likely because their member ownerships make them particularly attuned to customer needs. Unlike the pandemic-era Paycheck Protection Program, these institutions are left to their own devices to meet member needs.

Our take: The fact that a lengthy government shutdown would weigh on federal government employees’ and contractors’ finances poses a risk to bank and credit union balance sheets. But it’s also an opportunity for them to deepen customer trust. They could, for example, waive punitive fees, offer temporary bill relief, offer other short-term credit, and delay payments until the shutdown ends.

The goodwill effect is a strong relationship-building opportunity, especially for financial institutions that are struggling for relevance as they compete with banks with greater reach and a more attractive digital experience. Those that take the initiative will reap the long-term rewards.