Virginia governor: State employee loans pilot a success

RICHMOND, Va. (8/18/09)--A pilot for the Virginia State Employee Loan Program--a partnership between Virginia CU (VACU) and the Commonwealth of Virginia Campaign--has been called a success after one month of operation by Gov. Tim Kaine.

The program offers loans of $100 to $500 to state employees facing financial hardships. To date, it has issued $641,657 worth of loans to 1,300 state employees (M2 Presswire Aug. 15).

"I believe the early success of this pilot program clearly demonstrates that there is a need for these types of loans," Kaine said. "More important, it allows state employees the opportunity to receive small loans without having to go to predatory lenders. The success of this program demonstrates that other large employers can implement similar initiatives as a service to their own employees."

Program participants must be non-probationary state employees and members in good standing with VACU. To qualify for a loan, participants must successfully complete an online financial fitness course and a 10-question financial literacy exam.

The loans carry an annual percentage rate of 24.99% and are payable over six months with no prepayment penalty. Loans are repaid through direct debit from the employee's VACU checking or savings accounts, in up to 12 semi-monthly payments. Employees can have only one loan at a time and may apply for a maximum of two loans per year. There is no credit check for loans and they are not reported to credit agencies.

The $1.689 billion asset VACU is based in Richmond, Va.

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