Credit unions across the USA have set out their efforts to support federal workers affected by the government shutdown, which continues after more than a month.
Republican and Democrat lawmakers have been in stalemate over the federal budget since 1 October, credit unions are offering much-needed loans to those affected.
Apex body America’s Credit Unions says it is lobbying lawmakers on the situation and has put together a continuously updated database of credit unions offering help, listed by state.
Several initiatives are under way. In Oklahoma City, Tinker Federal Credit Union is working with a local food bank and community groups to support people facing financial and food insecurity, and launched a new hardship relief programme with 0% interest loans for qualifying members. Meanwhile, in Central California, Educational Employees Credit Union has activated a shutdown assistance programme for members needing financial relief.
“When it became clear that Congress had not reached a budget agreement by September 30, we were able to roll out our Government Shutdown Assistance Program immediately,” Mark V. Perez, EECU senior vice president of lending and marketing, told America’s Credit Unions. “Because helping members through difficult times is part of who we are as a credit union, we already had the structure, procedures, and staff readiness to respond.”
Affected EECU members have been offered zero-interest loans of up to US$10,000 for 30 days, skip-a-payment programmes, and waived penalties for early withdrawal from share and IRA certificates.
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“We placed a $10,000 cap on the amount to provide a clear, consistent structure that meets most members’ short-term income needs while maintaining responsible lending standards,” said Perez.
Providing assistance during difficult times has always been part of EECU’s identity, added Perez, with no impact on its long-term financial soundness.
“Offering temporary relief, such as short-term, no-interest loans, helps stabilise members’ financial situations” he said, “which in turn supports the overall health and sustainability of the co-operative.
“As member-owned co-operatives, this is what credit unions do. Our best advice is simply to remain true to the co-operative philosophy – be there for your members in both good times and bad. Having established relief procedures in place and acting quickly when needed makes all the difference in delivering timely, meaningful assistance.”
Similar efforts are under way at Navy Federal Credit Union, which allows eligible members impacted by salary disruptions to enrol in its Paycheck Assistance Program. Members whose pay is disrupted, but who do not meet the eligibility requirements, can visit a branch or telephone the credit unions to discuss their situation.
Likewise, Lafyette Federal Credit Union, which serves residents of Washington DC, Maryland and Virginia, offers loans of up to $35,000 at 5.99% APR, repayable over 36 months. The credit union also offers extensions consumer loan payments, and modified payment schedules on mortgage loans.
According to America’s Credit Unions, 90% of credit unions offer deferred payments on existing loans and 78% launched new loan programmes. Around 88% are offering modified current loans and 68% are waiving fees or penalties to reduce member strain.
In addition to loan relief options, 66% of credit unions are offering services including financial counselling and budget management support.
But credit unions “can’t do it forever”, warns CEO Scott Simpson. The apex is calling on Congress “to try and help create predictability and certainty in the marketplace”.
