Minnesota credit unions Monday were preparing contingency plans, rolling out special loan and “skip a payment” deals to members facing loss of paychecks should the state government shut down July 1.
Officials said it was still a 50-50 proposition whether a budget standoff between Democratic Gov. Mark Dayton and a Republican-controlled legislature might break prior to the July 1 deadline.
“We did have to go through something like on this kind of scale years ago during layoffs at the old Republic Airlines, which eventually merged into Northwest Airlines,” recalled Jeff Olson, assistant vice president of the $810 million US Federal CU of Burnsville.
Olson is heading up the CU’s Borrower Resources program developed by the CU’s Asset Protection Department encouraging loan restructuring and financial education packages.
“Loan restructuring, consolidation, credit repayment assistance, and financial counseling are services available through this program,” Olson said, adding that the CU also has a “Summer Bucks” loan promotion on short-term signature loans “that may help fill temporary financial need caused by the shutdown.”
The $833 million Hiway CU of St. Paul said it has received a handful of inquiries about “skip a payment” plans in July from its members, which includes about 8,100 Minnesota state employees, or 14% of its membership.
“We also handle state troopers and we understand employees will receive their July paychecks for the first week and there are also severance packages” mitigating any severe impact to the CU in the short term, said Jeff Schwalen, president/CEO. He added that “we will try to be lenient” as the consumer lending department fields requests.
For its part, US Federal said it will host financial counseling seminars June 27 and July 7 and is offering unsecured Survival Shutdown Loans.
“The Shutdown programs are just another way credit unions demonstrate their service philosophy,” said USFCU President/CEO Bill Raker. “In 1925 US Federal Credit Union was born out of a need in our community. Times have changed, but the demand for financial education and credit union services has not and in a time of need, that philosophy is more relevant than ever.”