Bill Would Authorize Interest Free Loans During the Shutdown

A new legislative proposal would require the Treasury Department to make interest free loans available to federal employees during the shutdown.

Legislation introduced this week would direct the Treasury Department to provide interest free loans at the request of federal employees who have been impacted by the ongoing partial government shutdown.

The Immediate Financial Relief for Federal Employees Act (H.R. 657) was introduced by Congressman TJ Cox (D-CA) and would require the U.S. Treasury to issue 0% interest loans up to $6,000 at the request of federal employees. Cox says it builds on the recently signed law that will guarantee back pay to furloughed federal workers.

Additionally, the bill stipulates that the loans would have no fees, would not accrue interest, and would not require a credit check.

Loans would be repaid through wage garnishments once the government reopens and normal pay resumes. The text of the bill states, “…the employer of the individual shall garnish 100 percent of the individual’s pay with respect to the applicable pay period, and transfer such amounts to the Secretary as repayment on the loan…until the loan is repaid in full.”

The bill also stipulates that the Secretary can issue regulations to provide for a loan repayment process to the extent that wage garnishments will not provide for full repayment of a loan.

There is a clause in the bill that would enable the Treasury Department to issue the loans even if the agency is shut down.

The terms of the bill state that the loans would be made available in the current or future shutdowns as long as they last at least 15 days.

Cox said in a statement about the bill, “Our federal workers are faced with the burden of not knowing how they will pay their mortgages, their bills, or put food on their tables. This is wrong, and it is unacceptable.”

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Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.