Credit Union 1 Offers to Bail Out Illinois Lawmakers
Illinois state legislators may miss their monthly paychecks on Wednesday, a tactic by Gov. Pat Quinn to convince lawmakers to meaningfully address the state’s massive pension debt.
If that happens, Credit Union 1 in Rantoul, Ill., is prepared to bail them out with low to no-interest rate loans.
Quinn announced on July 24 that he would use his line-item veto power to zero out the $13.8 million budget for legislative salaries and leadership stipends, eliminating the state’s ability to issue the next round of monthly paychecks.
The tactic is designed to “hit them in the wallet,” the governor told the Chicago Tribune. Quinn also will suspend his own salary until the debt problem is resolved.
Legislators who are members of Credit Union 1 with direct deposit qualify for a 0% loan equal to half of their $5,800 monthly salary for the duration of 60 days, according to Paul Simons, president and CEO of the $750 million credit union. Those who are not credit union members qualify for similar terms, but the loan will be treated as an unsecured loan at 10% interest.
Credit Union 1 serves several SEGs, including State of Illinois employees, but the program is only available to legislators. It’s also not the first time the credit union has come to lawmakers’ rescue, Simons said.
The program was instituted during a similar state budget crisis in 1991, then resurrected in both 2007 and 2009, Simons told Credit Union Times. The effort is similar to other emergency loan programs that kick in during labor negotiations, employer shutdowns and other times when groups of members find themselves without a steady paycheck.
Loan payments to the credit union also are suspended during such periods, Simons says.
The program, which has to date attracted only a handful of participants, is in keeping with the credit union’s commitment to members and does not reflect a political position within the current situation, said Simons.
“There is no way we want to get involved in the dispute,” he added. “We’re just trying to help our members.”