WASHINGTON — As the Department of Homeland Security shutdown stretches on amid a funding dispute tied to immigration enforcement, credit union trade groups say the impasse is beginning to create financial strain for federal employees — particularly those who continue working without pay — while warning that prolonged uncertainty could deepen the impact on households served by credit unions.
America’s Credit Unions SVP of Government Affairs Greg Mesack said the immediate impact on credit unions remains manageable but is being closely monitored because many institutions serve DHS employees and other essential workers now facing missed pay periods. Meanwhile, Defense Credit Union Council Chief Advocacy Officer Jason Stverak said the shutdown is already hitting members of the United States Coast Guard particularly hard, as they continue to report for duty despite uncertainty over pay, creating mounting financial stress for families and increasing demand for credit-union emergency assistance.
“The continued shutdown of the Department of Homeland Security is not just a budget process dispute, it is a real, human issue with direct financial consequences for the dedicated men and women of the U.S. Coast Guard and their families. Because the Coast Guard is funded through DHS rather than the Department of Defense, its members are uniquely vulnerable to funding lapses: they continue to serve on duty while paychecks become uncertain or delayed,” Stverak said. “We are now seeing exactly the kinds of outcomes we warned Congress about.”
Without predictable funding, Stverak pointed out Coast Guard personnel may face missed pay periods, which can lead to immediate hardships, from difficulty meeting mortgage and rent obligations, to increased late fees, stress on credit profiles, and long-term financial insecurity for households that live paycheck to paycheck.
“Credit unions are stepping up as first responders for financial stability, offering emergency loans, fee waivers, payment deferrals, and counseling. But emergency assistance is a stopgap, never a substitute for regular, reliable pay. Families should not have to depend on charity or short-term loans because of Congressional impasse,” he said. “We call on Congress to act swiftly to restore full DHS appropriations and to pass permanent statutory protections, such as the bipartisan measures we have supported, that guarantee Coast Guard pay during any future funding lapse. Those who protect our nation’s coastlines and respond to maritime distress deserve financial certainty, not uncertainty wrought by budgeting brinkmanship.”
Mesack called the shutdown an “unfortunate situation.”
“The Department of Homeland Security is shut down, and a majority of its staff are considered essential, so a lot of people are unfortunately working without pay right now,” reminded Mesack. “As we saw during previous shutdowns, the longer this drags on and pay periods are missed, the greater the impact becomes.”
For credit unions, Mesack said, the immediate impact is not huge.
“But we are still closely monitoring developments,” he said. “We do have credit unions that serve employees within the Department of Homeland Security, and we know this situation affects them directly.”
Now that the holdup over DHS funding is largely tied to disputes around ICE, there are questions about how far this will have to go before it’s resolved, Mesack noted.
“On a positive note, people are at the negotiating table,” he said. “There have been sincere offers going back and forth between the White House and Congress, and the fact that those offers aren’t being made public — or rolled out through press releases — suggests there are meaningful, confidential negotiations taking place.”
What will it take to push both sides to strike a deal?
“Unfortunately, it may take something external,” Mesack said. “It could be a situation where a disaster occurs and response teams cannot operate because they are unfunded, or where TSA begins to experience more absences and operational strain that could affect airport security as the shutdown continues. Those kinds of pressures could force both Congress and the White House to come together.”
POLITICO reported the White House on Tuesday dismissed Democrats’ latest offer in negotiations to fund the DHS, saying the “parties are still pretty far apart.”