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As debt ceiling looms CUs plan for members
MADISON, Wis. (7/29/11)--Facing the possibility of major disruptions to the federal government's operations from an impasse, credit unions serving federal workers are putting in place contingency plans to help affected members. Credit unions that serve government employees are familiar with this type of contingency planning. In April many credit unions with federal employee members were prepared to offer assistance to members in the event of a government shutdown over a possible federal budget impasse. Chris McDonald, president/CEO of Andrews FCU, Suitland, Md., said preparing for a disruption for the second time is easier on some levels, but not emotionally. “From a procedural standpoint, it’s much easier but it’s discouraging too,” McDonald said. “We’re dealing with real lives here. Our members are trying to get through the tough financial decisions in their lives and they can’t figure out why Washington can’t work this out, why Washington is playing politics on their backs. We’ve made the commitment to do everything we can so they don’t feel that.” Jason Lindstrom, chief marketing officer at $275 million asset Belvoir FCU Woodbridge, Va., said having a plan in place alleviates any anxiety for both the members and the credit union. “If they do ask us about needing help we have a plan in place,” Lindstrom said. “We actually had a couple calls from members this morning--not asking for help--but thanking us for being there to help them.” Belvoir FCU, Woodbridge, Va., has introduced an Emergency Assistance Loan, skip-a-payment for members who currently have loans with the credit union, and free financial consultation services to help members. Belvoir FCU serves the Fort Belvoir community and several select employee groups. Andrews FCU, which serves the District of Columbia, Andrews Air Force Base, McGuire Air Force Base (N.J)., and military installations in central Germany, Belgium, and the Netherlands, will advance mid-month payroll scheduled for August 15 to active duty military members who have direct deposits with the credit union. The one-time advance provides military members with the means to pay mortgages and other important expenses even when their government paycheck is unavailable. The amount advanced will be based on the mid-month payroll received in July. Andrews FCU will also offer 0% annual percentage rates loans to members who receive other government direct deposits, including military retirement pay. The 0% APR loans will have a 30-day repayment term. Justice FCU, with $514 million in assets, Chantilly, Va., will offer current and potential members a special Furlough Relief loan. Affected current members will also be offered deferred payments on any existing consumer loans or credit cards that are carried with Justice FCU, which exclusively serves employees of the Department of Justice, the Department of Homeland Security, law enforcement communities, their family members, related associations, and contractors. The special Furlough Relief loan will allow current and potential members a 0% interest rate for 60 days, at which time the interest rate will convert to 4.90%. The repayment term will be 12 months and the maximum amount will be up to $3,000. “Supporting our members in a time of financial stress is important to us,” said Justice FCU president/CEO Pete Sainato. “Providing assistance to our law enforcement community is a vital part of our operation. We were there for our members during the last government furlough and plan to be there for them this time should the government shut down.” STAR USA FCU, Charleston, W. Va., is working with federal government employees who may be impacted by a shutdown, and also “retiree” members who are receiving government benefit checks like social security. STAR USA is offering short term loan would be at a 5% APR anyone DD those who are not delinquent prior to any shutdown. STAR USA has a community charter and serves many federal employees who work at the Veteran’s Administration Hospital in Huntington, W. Va. The credit union also has a high number of retired employees who receive government benefits. “I think everyone believes it’s going to be worked out in a short period of time,” said STAR USA president/CEO Dan Smithson. “But we feel that we know our membership well enough that we can help them through a difficult time if it comes to that.”


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