MADISON, Wis. (9/27/13)--Credit unions, as they have done in the past, stand ready to help members and consumers who could be impacted by a possible federal government shutdown next week.
Although the shutdown is unlikely--and the economic impact would be small at first, according to a Thursday USA TODAY article--credit unions will be prepared should the situation escalate. Many federal employees are members of credit unions, and many other members receive government benefits.
"Credit unions always put members' needs first and this time is no different," John Bratsakis, president/CEO of the Maryland & DC Credit Union Association, told News Now. "We are proud that the majority of our credit unions serving government employees have products and services to assist in the event of a possible shutdown and are ready to help members cope with any financial hardships that could be a result of this.
"Many offer short term loans, will work with members to restructure loans if necessary and some offer a skip-a-payment option," he added. "Additionally, many offer free financial counseling to help members make informed decisions. Our credit unions will monitor the decision closely and will handle each situation individually to ensure the best care is given to their members."
If a shutdown were to last three to four weeks, it could do substantial harm to the economy, cutting its growth rate by half or more, Mark Zandi, chief economist for Moody's Analytics, told USA TODAY.
Some credit unions who serve government employees are already poised to take action.
"Many of our members were furloughed starting in May and we implemented 'Furlough Loans' back then and didn't start their payments until Sept. 16, which was after the last furlough date," Mike Funk, president/CEO of LibertyOne CU in Dallas, told News Now. "We also worked with our members on restructuring debt and helped advise them on things they could do to help them get through this time. We will be here for them if the government is shut down in much the same way."
Randolph-Brooks FCU (RBFCU) in Live Oak, Texas, is providing its members financial options to take care of their families in the event of government shutdown, the $5.6 billion asset credit union said in a release.
If a government shutdown occurs following the end of the government's fiscal year Sept. 30, some federal employees or benefit recipients might not be allowed to work or to receive pay until a compromise is reached. RBFCU said it will provide members with a one-time provisional credit if they are government employees or benefit payment recipients affected by the shutdown.
"These are uncertain times for our country, and we want to continue to provide our members with peace of mind when it comes to their finances," said Sonya McDonald, RBFCU senior vice president of planning and market development. "While we hope the government will resolve its budget issues, we are being proactive in providing solutions for our members in the event that a shutdown does occur."
Also, Service CU in Portsmouth, N.H., is offering a 0% loan, up to $6,000, for members who use the credit union for direct deposit of their government pay. And Belvoir FCU in Woodbridge, Va., is offering emergency loans, loan workouts, skip-a-pay and penalty-free share certificate withdrawals to members affected by a government shutdown (The Paycheck Chronicles Sept. 25).
Providing service excellence is one of the tenets for the Credit Union National Association's, state credit union leagues' and credit unions' Unite for Good campaign toward a vision in which Americans choose credit unions as their best financial provider. The other tenets are removing barriers, and raising awareness about the value credit unions provide their members and communities.