WASHINGTON— What credit unions and their trade groups had warned about earlier this week has now come to pass: the government has shut down after lawmakers failed to reach a budget deal by the Tuesday midnight EST deadline.
White House budget director Russell Vought on Tuesday evening ordered federal agencies to activate their shutdown plans after Senate Democrats blocked a Republican proposal to keep the government funded past midnight, POLITICO reported.
In a memo, Vought instructed department and agency heads to “execute their plans for an orderly shutdown,” formally triggering the first federal government closure since President Donald Trump’s initial term, POLITICO said.
The order triggers furloughs for hundreds of thousands of federal employees and halts a broad array of government services. In recent days, agencies have outlined which positions and programs will be considered essential and continue operating despite the funding lapse. Separately, Vought has directed agencies to draft plans for permanently shrinking the federal workforce through mass layoffs carried out during a shutdown, POLITICO said.
In the Tuesday memo, Vought said that federal employees should “report to work for their next regularly scheduled tour of duty to undertake orderly shutdown activities.” He added that federal agencies "should continue to closely monitor developments, and OMB will provide further guidance as appropriate," POLITICO noted.
Both America’s Credit Unions and the Defense Credit Union Council said Monday they saw a shutdown as all but inevitable. The groups expressed particular concern that this closure could be more disruptive than past ones, given the prospect of mass firings tied to reduction-in-force plans.
“Congress’s failure to pass a continuing resolution is deeply disappointing, as it leaves millions of Americans — especially servicemembers, veterans, and their families — facing unnecessary financial and personal stress,” Jason Stverak, chief advocacy officer at the Defense Credit Union Council, told CUToday.info. “For the men and women in uniform who may not receive paychecks on time, the effects of a shutdown are immediate and severe.”
Stverak noted that defense credit unions have always stood shoulder to shoulder with their members in times of uncertainty.
“And this moment is no different,” he said. “From past shutdowns, our credit unions know how to respond: extending low- or no-interest loans, offering paycheck advances, waiving fees, and providing personalized financial counseling. These resources are not just lifelines — they are a reflection of the mission and purpose that sets credit unions apart. Our members can take comfort in knowing that their credit union is here to help them weather the storm, no matter how long it lasts.”
Stverak added that DCUC is working closely with its 200+ member credit unions to ensure they have the information, tools, and support they need to assist their communities.
“We are also staying in direct contact with policymakers on Capitol Hill, urging them to put aside differences and complete the work of fully funding the government. Temporary political gridlock should never come at the expense of those who serve and sacrifice for our nation,” he said.
“As we move forward, DCUC will continue to advocate for military families and to highlight the vital role credit unions play in maintaining financial readiness,” continued Stverak. “While Washington debates, defense credit unions are already taking action to make sure servicemembers and their families can pay their bills, keep food on the table, and focus on their missions. That is our promise, and it will not waver.”
America’s Credit Unions expressed concerns about large-scale workforce cuts.
"America's Credit Unions supports stability of our federal government, and we urge Congress to quickly come to a resolution to restore functions as soon as possible," stated Jim Nussle, ACU president/CEO. "With the added potential for permanent job losses as a result of this shutdown, we are closely monitoring how it will impact credit unions, their 144 million members, and the communities they serve. While this is not the outcome we were hoping for, credit unions have been preparing to support members affected by the shutdown. Credit unions will do whatever they can to help people through this financial uncertainty just as they always have."
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