Shutdown offers US banks PR opportunity
The US government shutdown has handed banks a rare opportunity to tout their nicer side as they prepare for rough treatment under a Democrat-controlled House of Representatives.
Sparked by a standoff between Democrats and Republicans over president Donald Trump’s demand for a wall on the Mexico border, the partial shutdown is the longest ever, entering its 35th day on Friday.
The president announced on Friday he would back a bill to reopen the government for three weeks as a temporary reprieve, but the financial repercussions from the shutdown could last weeks.
With around 800,000 federal workers missing a second paycheck on Friday, lenders including Wells Fargo and Bank of America as well as their Washington lobby groups, have been quick to trumpet their efforts to waive fees, delay debt repayments and give a helping hand to federal workers.
“It is a big opportunity,” said Brian Hart, founder of Flackable, a Philadelphia-based public relations and marketing agency for financial services companies. “But you need to be delicate and sensitive about how to approach it.”
Still tainted by the 2007-09 financial crisis, the industry has been searching for ways to repair its image in Washington, where bank bashing is a competitive sport among liberal Democrats.
That hostility is set to intensify with progressive firebrand Maxine Waters taking over as chair of the House Financial Services Committee and Wall Street critic senator Elizabeth Warren exploring a bid for the 2020 presidential race.
Warren and Waters have urged lenders to go easy on cash-strapped federal workers, but on this occasion the industry – spying a rare public relations opportunity – has been one step ahead of their Capitol Hill critics.
Earlier this month, Bank of America launched a program to help affected customers and pledged $10,000 to an emergency fund to provide assistance to furloughed workers.
Wells Fargo, which is struggling to scrub its image following a series of scandals, has given $250,000 in charitable assistance and so far waived around $3 million in fees, according to chief executive officer Tim Sloan, who condemned the government shutdown as “completely embarrassing” in comments to “CBS This Morning” on Friday.
Not to be outdone, JPMorgan CEO Jamie Dimon on Friday said in a memo that the bank was donating $1 million to charities providing assistance to federal workers.
In Washington, industry groups such as the American Bankers Association (ABA) have been quick to create websites showcasing such efforts, which they have also enthusiastically flagged to lawmakers.
“A furloughed federal employee was so appreciative of receiving an unsecured loan from a bank to help him make ends meet that he offered to move his other accounts when the shutdown ends,” ABA CEO Rob Nichols wrote to Waters this week.
Even Warren, the industry’s leading adversary, coughed up some praise for lenders in letters sent to bank chiefs this month seeking details on their assistance programs.
“I ... was pleased to see many credit unions and banks that serve federal employees act quickly to help them,” she wrote.