Furloughed Employees Turning to Credit Unions
Federal government employees that have been furloughed due to the ongoing government shutdown have been taking advantage of assistance offered by their credit unions.
The $2.3 billion Service Credit Union in Portsmouth, N.H., for example, said it has credited direct deposits of full or partial pay for more than 1,400 Department of Defense civilian employee members impacted by the shutdown.
“By calculating the last direct deposit of the members and making up the difference, Service Credit Union credited members. This credit covers biweekly payrolls on October 11th for members with an existing Service Credit Union direct deposit who are paid by DFAS CIVFED SAL or DFAS FED SALARY,” said a Service CU press release on Thursday. “This one-time service is cost free and will be debited from accounts with the next payroll.”
Members who sign up for direct deposit are eligible for a special 4.9% APR shutdown loan up to $1,000. Service CU is also allowing non-members to join the credit union and take advantage of the same offer.
“As a result of the government shutdown, many of our members were impacted either receiving no or partial pay. We believe it is our responsibility to make our members whole,” said Gordon Simmons, president/CEO of Service Credit Union.
“Our top priority is to ensure the financial well-being of our members. We stand ready to assist our members and ease the burden during these trying times,” he added.
Since Oct. 1 when the shutdown took effect, the $599 million Justice Federal Credit Union in Chantilly, Va., said it's seeing more than $1 million per day in special unsecured, zero and low interest rate loan applications. The credit union expects this number to rise as the shutdown continues.
Credit Union Times reported on Oct. 4 that the shutdown had resulted in 353 loan applications for furloughed federal employees at Justice FCU totaling $1,834,046. As of Oct. 11, Justice FCU has “received well over 1,500 Special Assistance Furlough Loan applications from furloughed federal employees totaling nearly $8 million,” the credit union reported.
Justice FCU has also received almost 1,000 loan payment deferral requests for existing consumer loans. Prior to the shutdown, Justice FCU told Credit Union Times it averaged 350 calls to the member service call center per day prior to the shutdown.
Since the shutdown began, it has been averaging 727 calls each day.
“Justice FCU Members affected by the federal government shutdown may apply for a special unsecured loan up to $10,000 at an annual percentage rate of 0% for the first 60 days. After that time, the rate will convert to 4.90% for a term of 24-months. The loan amount is based on the member’s net pay deposit, with direct deposit required,” according to a Justice FCU press release issued on Thursday.
“In addition, members may defer their first loan payment for up to 60 days. Existing members with a Justice FCU consumer loan, or VISA credit card, may request to defer one payment per loan,” the release also said.