The Government Shutdown and the Repossession Industry – A Repo Alliance Update

The Repo Alliance is your voice in Washington, D.C. We serve the entire repossession community. Here is an update and some advice.

At this moment, the Federal government is shut down. This shut down has been looming for weeks if not months. The effect of this is thousands of federal employees are without work temporarily and some may be permanently released.

According to press reports, congressional leaders and President Donald Trump have not reached a resolution on government spending.

There are several roadblocks between the parties preventing an agreement and we hope they can be resolved soon.

Reduction-in-force plans must be submitted to the OMB, led by Russ Vought, who also serves as interim director of the Consumer Financial Protection Bureau.

Repossession Recommendations

Other than Nevada, we currently know of no state-level laws offering specific protection during federal shutdowns. However, recent federal actions and legislation have aimed to provide relief:

Federal Employee Civil Relief Act (Proposed): Legislation has been repeatedly introduced in Congress to protect federal workers and contractors from adverse financial actions, including repossessions, during a shutdown. If passed, the bill would allow furloughed employees to apply to a court to temporarily postpone financial obligations, such as auto loan payments.

Federal regulatory guidance: During a shutdown, financial institution regulators—such as the Consumer Financial Protection Bureau (CFPB)—have historically encouraged lenders to work with affected borrowers. These advisories recommend that lenders consider modifying loan terms or extending new credit, but these measures are voluntary.

As stated, it has already been brought to our attention Nevada passed a plan putting a moratorium on repossessions of affected Federal employees which extends to thirty days after the federal shut- down ends.

Much like approaches used during the COVID-19 pandemic or when consumers are affected by natural disasters, the repossession industry should take steps to check state laws and check for any updates on federal executive orders that may affect us. The Repo Alliance will be on the watch for these as well.

Let’s hope our government leaders will work together to end the shut down but the word from Politico, a Washington D.C. political daily newspaper, is that it may be a while.

What is a Shutdown?

Each year, Congress passes spending bills which provide most federal departments and agencies with their operating budgets for the fiscal year which expires September 30^th. A shutdown occurs when Congress has not enacted a law providing the next year’s funding. Federal departments do not have the money to operate, so they effectively shut down. During a shutdown, federal law only allows federal activities to continue during a shutdown which are 1) funded by sources of revenue other than annual spending bills, 2) are constitutional duties, or 3) jobs related to the safety of human life or the protection of property. Federal departments and agencies deem employees who carry out those duties as “essential” or “exempted”. Employees who do not meet those duties are deemed “non-essential” and can be furloughed or fired. A significant amount of the federal workforce is furloughed.

Even for essential personnel who continue to work during a shutdown, many of their day-to-day duties are suspended, including (with some exceptions):

Entering into new contracts or grants
Approving new licenses, permits, or similar certifications
Technical assistance for existing grantees/contractors
Federal employee travel
Interagency collaboration
Processing of applications for beneficiaries under SNAP, TANF, Medicaid, Social Security, and other federal benefit programs

Here is a consolidated list of departmental and agency contingency shutdown plans:

Department of Justice: https://www.justice.gov/jmd/media/1377216/dl
Department of Transportation:

https://www.transportation.gov/sites/dot.gov/files/2025-09/DOT_Shutdown_Plan_9.30.25.pdf

Federal Trade Commission: https://www.ftc.gov/system/files/ftc_gov/pdf/FTC%20Shutdown%20Plan.pdf
Small Business Administration: https://www.sba.gov/sites/default/files/2025-09/Final%20SBA%20Lapse%20Plan%20September%202025%20%209.30.25.pdf
The Consumer Financial Protection Bureau is not funded through annual appropriations, thus its operations continue as normal.

What Does The Shutdown Mean For Repo Alliance Advocacy?

The shutdown will slow some of the Repo Alliance’s ability to advocate with federal lawmakers and agency officials. For example, meeting with officials from the Federal Trade Commission or Small Business Administration will most likely not be allowed until the shutdown is concluded. The Consumer Financial Protection Bureau is funded through bank user fees instead of Congressional appropriations, so the Bureau is not affected by the shutdown.

Congressional outreach is largely the same. The Repo Alliance had a very constructive meeting with the Senate Banking Committee during the shutdown, and it showed no signs of problems.