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Payday Passes, Fed Employees Seek Help From CUs
MADISON, Wis. (10/15/13)--Friday's payday drove home the implications of the federal government's partial shutdown for many federal employees who received half their pay. With the shutdown beginning its third week, credit unions, who already have furlough assistance plans in effect, are receiving requests for help from the furloughed workers.
 
Furloughed workers on Capitol Hill have begun contacting their credit union, Wright Patman Congressional FCU. The $768 million asset credit union has received several calls from people in tears about their finances, its staff told buzzfeed.com (Oct.10).
 
The Washington, D.C.-based credit union offers a relief loan program at 0% annual percentage rate (APR) for 90 days. After that, the rate increases to 4% APR and is automatically extended to 36 payments. It also offers personal loans, lines-of-credit limit increases, payment deferment on existing loans, quick delivery of credit and debit cards and checks, and financial coaching. It requires a copy of the furlough notice or proof of employment at the impacted employer. The furloughed employee's salary and credit score determine what the loan amount will be.
 
M-O FCU, a $25 million asset credit union  in Huron, S.D., launched a "We Stand Ready..." campaign geared toward the federal and postal employees it serves, according to the Credit Union Association of the Dakotas (The Memo Oct. 10).  It took out newspaper ads and sent e-mail blasts to members, posted information on its website, hung posters in its lobby, and handed out flyers in money envelopes.  Many members responded positively, said CUAD. 
 
"We have had a few federal employees call in to discuss their options, and tell us how relieved they are that we are willing to help them out during this time of need," said Tiffanie Gebhart, M-O FCU's marketing coordinator.
 
Census Bureau employees  have asked $64 million, Washington, D.C.-based Census FCU about its Skip-a-Payment program. The credit union told the Washington Post (Oct. 11) that its staff have been working a few hours at the nearly deserted headquarters to meet the demand for assistance.
 
About a dozen furloughed federal employees have applied for the special Furlough Relief Loan offered by $29 million asset Miami (Fla.) FCU, President Athan "Buster" Castiglia told the Miami Herald (Oct. 9).  One woman earning about $55,000 annually told him she does not have enough reserves to go very long without pay. She's one of the mass of people in the U.S. who are living one paycheck away from the street, he said. "All you need is something like this."  The credit union's loan allows a worker to borrow up to $3,000 interest-free for 60 days. After two months, a 12% interest rate kicks in. However, Castiglia noted the loan is designed for workers to pay off the balance when the furlough ends and reimburses workers for lost pay.
 
Arsenal CU in Arnold, Mo., which serves a large number of National Geospatial Intelligence Agency members who have been furloughed, is offering unsecured loans at 0% for 12 months and hardship deferments, which allow members to skip a payment without penalty, said the Missouri Credit Union Association (Missouri Difference Oct. 9).
 
"As a not-for-profit cooperative, accommodating financial hardships affecting large segments of our membership is one of our core beliefs," said Linda Allen, Arsenal president/CEO, told MCUA.  "Allowing members to defer a payment or receive a short-term loan allows them to stay on a sound financial course during a temporary bump in the road. It's one less thing they have to worry about."
 
Desert Valleys CU,  a more than $23 million asset credit union in Ridgecrest, Calif., initiated "Shutdown" loans up to 100% of an employee's net paycheck amount, with options for a 60-day repayment period at 0%  interest.
 
"The mission of a credit union is to provide cooperative help and assistance to their community, and we see no better way to demonstrate this than helping these families while our country's leaders sort out political differences," said Eric Bruen, CEO of Desert Valleys.
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