2025 Government Shutdown: What it Could Mean for Credit Unions and Tech

By W.B. King

As of October 7, 2025, the federal government remained shuttered. The stalemate began October 1—the start of federal fiscal 2026. As discussions between Democrats and Republicans were stalled on Monday afternoon, legislators, along with the American public, were reminded of the 2018-2019 government shutdown that lasted for 35 days. Currently, only “essential” services like the military and law enforcement are functioning. Forty percent of the “non-essential” federal workforce – approximately 750,000 people - are expected to be furloughed and roughly two million federal workers’ pay has been suspended.

When the shutdown was announced, the NCUA, an independent agency of the federal government, said that it will remain open and individual accounts will remain federally insured.

“The government shutdown could affect credit unions, particularly those with federal employees in their memberships,” the NCUA stated. As such, the NCUA suggested that credit unions should plan to respond to members’ questions and consider other actions, such as:

• Ensuring policies provide flexibility to respond to members’ financial needs.

• Preparing for service interruptions if the shutdown affects access to credit union offices located on federal property.

• Prudently working with affected members, including providing advances to individuals receiving direct deposits from the federal government.

• Developing contingency plans with respect to participation in government programs that may be affected by the federal government shutdown.

• Communicating response plans to members, staff and volunteers in a timely manner.

  
  

“Consistent with standards of safety and soundness, credit unions should also work with their members to address any financial difficulties that a shutdown may create. Working constructively with credit union borrowers who may experience financial difficulty as a result of any shutdown is in the long-term best interest of both the credit union and the member,” NCUA Chairman Debbie Matz noted. “Credit unions may therefore consider offering special programs to assist members who may need short-term loans or other financial assistance. Credit unions may also create loan programs with special loan terms and rates. Additionally, credit unions may offer payment flexibility for existing loans to federal employees affected by any shutdown.”

Matz further explained that NCUA operations are not funded through congressional budget appropriations. “Therefore, NCUA will continue to operate business as usual in the event of a shutdown. As always, individual deposits at credit unions will also remain protected up to $250,000 before, during and after any shutdown.”

Legislators on either side of the aisle are hopeful to pass a continuing resolution (CR). If the CR is passed, the government would be funded through Nov. 21. Already passed in the House of Representatives, a late Monday afternoon vote in the Senate was unsuccessful.

Will the Shutdown Impact AI Adoption Rates?

As a result of the shutdown, America’s Credit Unions announced that the House Financial Committee postponed hearings originally scheduled for this week, including one on artificial intelligence (AI) in financial services. Postponing such hearings presents hurdles as America’s Credit Unions Chief Economist Curt Long noted in his monthly “Economic Update” that the credit union industry “seems to be at an inflection point” with AI.

“There’s still plenty of optimism about its potential, and investments in the technology are driving economic growth, but there is also a growing anxiety, both from AI skeptics who doubt it will live up to the hype, and from those who fear its potential power over the economy and society over as a whole,” Long said. “Credit unions are generally not risking their members’ money on unproven, emerging technology, but that doesn’t mean the industry should be left on the sidelines.”

While it’s undetermined when the government shutdown will end, Long said AI will remain an economic driver for the foreseeable future.

“In the last quarter, it’s estimated that AI and data center investments contributed more to headline GDP growth than consumers did,” said Long, who also serves at the organization’s VP of data and research. “Realized and planned adoption of AI has doubled over the last 12 months,” he said, referencing a survey of 200,000 businesses that also found that financial service labor markets are most impacted by AI adoption rates. “There are a lot of questions about how long this AI run will last, both in the stock market and workplace. One thing is certain: we will all be talking about it.”