Government Shutdown Loan Guarantee Program

The program provides guarantees on loans lenders issue to federal, or state employees affected by a government shutdown. It is administered by the Finance Authority of Maine, the State Treasurer, and the Bureau of Financial Institutions.

A financial institution or credit union in good standing—meaning it is insured by the FDIC or NCUA—may qualify. Institutions must submit an application to the Bureau of Financial Institutions, which will determine eligibility within five (5) business days.

Apply to the Bureau of Financial Institutions by emailing a completed, scanned copy of your application form to Chase Hewitt. Once approved, you may begin issuing loans in accordance with the terms outlined in LD874 to eligible affected employees and must notify the authority within five (5) business days of each loan issued using the web-based Loan Origination Reporting Form.

An eligible affected employee:

• is a resident of Maine;
• is employed by the federal or state government;
• is either furloughed or required to work without pay during a shutdown;
• provides proof of employment, income, and residence; and
• submits a sworn affidavit confirming eligibility and unemployment compensation details.

No, an eligible financial institution may not use an affected employee’s creditworthiness as a factor for the purposes of determining eligibility for a loan under this subchapter.

• Maximum loan amount: $6,000
• Lesser of employees most recent monthly after-tax pay OR  $6,000 minus 4X employee’s earned or eligible weekly unemployment benefits
• No repayment required during the grace period.
• No interest or fees during the grace period or for 180 days after.
• Repayment must be completed within 180 days post-grace period, in 3–6 equal installments.
• No penalties for early repayment.

“Grace period” means the period beginning with the disbursement of a loan under this subchapter and ending 90 days after an eligible affected employee receives disbursement of the loan or at the end of the shutdown during which the loan was made, whichever is later.

Yes. One additional loan may be issued for each 30-day period beyond the first, up to a maximum of three loans per shutdown. Updated documentation is required for each loan.

Between 180 and 300 days after the grace period ends, institutions that have made a good faith effort to collect may file a claim for the outstanding principal. The Authority will review and submit approved claims to the Treasurer of State for payment.  Once FAME receives payment from the Treasurer, they will pay the lender the amount of the approved claim.

• Assign the loan to The Authority.
• The Authority will continue collection efforts.
• Maintain accurate records and comply with program requirements to avoid termination of guarantee agreements.

Deferred or uncharged interest is exempt from state taxes. However, institutions must inform borrowers of potential federal tax consequences.

No. Applications and approvals must occur during the shutdown period.

The Government Shutdown Loan Guarantee Program Fund is $250,000.