MADISON, Wis. (4/11/11)--Credit unions with close ties to federal workers continued to play an integral role in preparations Friday for a possible government shutdown at midnight Friday. However, Congress avoided the shutdown by striking a budget deal an hour before the deadline. An article in the The New York Times
(April 8) noted how credit unions prepared early for the possible shutdown and began offering furlough loans and similar financial assistance to some of the 800,000 government employees who would have been sidelined by a shutdown. The Credit Union National Association provided information for the article, which specifically described how NASA FCU would offer a 0% interest paycheck and furlough relief loans. Members of Transportation FCU, Washington, D.C., can apply for loans up to $3000 or two weeks of net pay, it said. Below the national media radar, credit unions nationwide serving federal workers were putting similar plans in place. Although they won't have to implement the special assistance, here is a rundown on what they had planned. The South Carolina Credit Union League reported that four of its member credit unions would extend services to affected federal workers:
* Palmetto Trust FCU, Columbia, offered a 30-day, 0% annual percentage rate (APR) loan for missed direct pay deposits during a shutdown. For members without direct-deposited pay, the same loan was offered at 3.5% APR. Loans were eligible for 30-day extension or reissue until the shutdown ends. * SPC CU, Hartsville, offered a 0% APR loan in lieu of net pay. * Members of CPM FCU, North Charleston, were told they could get a furlough loan for up to $2,000 with the first payment due in 60 days. There were no credit requirements or risk-based characteristics. * Charleston Area FCU said it would offer deferred payments on existing loans until affected members are paid, and would extend to eligible members on direct-deposit an interest-free, single-pay loan of up to $3,000 for those who would receive retroactive pay. Federal employees who would not receive pay for the shutdown period could request an unsecured loan.
In Portsmouth, N.H., Service CU was planning to credit direct deposit and allotments for military and government service members affected by a shutdown. The credit union also would provide a 0% loan rate with up to a 30-day payback and a line of credit up to members’ direct deposit amounts. Belvoir FCU, Woodbridge, Va., offered furlough emergency loans up to $5,000 with payment deferred for the first 60 days. The credit union also offered a skip a payment option for members who have loans and personal financial consultation services. At Hanscom FCU, Hanscom Air Force Base, Mass.,members whose paychecks were affected by a furlough would have access to a 0% APR interest line of credit equal to one month’s net payroll up to $5,000. Dubbed the Life Line Loan, this interest-free loan was attached to a member’s checking account to provide additional funds to cover checks, ATM withdrawals and debit card purchases. Also, the credit union said it would waive penalties for premature withdrawals on certificates of deposits for affected members. Justice FCU, Chantilly, Va., provided a furlough relief loan up to $3,000 at a 0% interest rate for 60 days. Loan amounts would have been based on the member’s net paycheck and require direct deposit with the credit union. Global CU, Spokane, Wash., offered members employed by the federal government interest-free loans to cover delayed pay checks and said it would extend auto loan and credit card payments without fees. Andrews FCU, Suitland, Md., announced it would advance mid-month pay on April 15 to active duty military members who had direct deposits. The credit union also offered 0% APR loans to other federal employees who have direct payroll deposits. The loans would have a 30-day term for repayment.