It would seem that the government shut down has impacted millions of people from all walks of life. Add credit card applicants to the list.
The Internal Revenue Service – whose operations affect everyday financial transactions and loan processes – has been furloughed since October 1st after the United States House of Representatives failed to pass a continuing resolution to fund the federal government. The reach of the IRS in everyday life can be felt in application processes for a variety of loans.
Mortgage companies, for instance, have relied upon income verification for any new mortgage or refinancing solution for many years. With the IRS' doors currently shut, the roughly two million requests for information from lenders and banks per month have been completely stopped. Small business loans have likewise been impacted, along with credit card applications. Some employers have even taken the step lately of using these income verification checks to ensure that their prospective employees are on sound enough ground to be trusted in employment.
As we enter the 15th day of the shut-down, it is estimated that approximately 500,000 credit card application forms are waiting in IRS offices around the country. These forms must be physically faxed to the agency and are not transmitted through an electronic system, which means that there are a half-million forms waiting in the queue (and presumably scattered across the floors) for agency employees once they return.
Mortgages and home closings have also been impacted. Banks and other agencies have begun utilizing a series of workarounds as the shut-down continues, requesting that individuals furnish physical copies of tax returns or using a signed form to verify proof of income. These workarounds still have not resulted in there not being a backlog of mortgage and home closing applications for lenders and agencies around the country.
Anyone who has applied for a credit card will unfortunately have to wait until the federal government re-opens before a verdict on their application is rendered. With negotiations in Washington at a relative standstill, the shut-down could possibly continue for several more weeks. Until then, any and all applications will likely remain unanswered and in limbo.