WESTBROOK, Me. – No consumer should have to choose between whether to spend money on heating their home, buying food for their family or paying their mortgage, rent or other bills. But with the average price of heating oil nearly double what it was just a year ago in many areas around the country, that's exactly the predicament many consumers are facing this winter. Now, Maine's credit unions have stepped up to help members avoid finding themselves in that situation. An informal survey by the Maine Credit Union League showed that at least one-third of its affiliated 73 credit unions are offering some sort of fuel assistance program. That includes offering members special low or no interest loans designated for fuel assistance. In recent weeks, the Maine league said the number of credit unions offering special fuel loans has risen "sharply." Maine Highlands FCU, Dexter, was among the first CUs in the state to introduce the loan for its approximately 11,600 members. "Our board felt that this was something that we could do to help our membership get through the winter comfortably," said President/CEO Rhonda Taylor, noting that it was the first time the CU has offered this type of loan. The $52 million MHFCU began offering fuel loans in October even before the "hard winter" set in, said Taylor, so members could get pre-buys on fuel when the prices were still reasonably low and before the prices got too high. She said the price of oil has almost doubled and now runs $2-$2.25 a gallon, depending on the grade of oil. Since many people living in the area tend to use alternative sources of fuel for heat such as wood, Taylor said the loans can be used to pay for those purchases as well. MHFCU's fuel loans are limited to $1,500 per member, and Taylor said not every member who has taken the loan has applied for the maximum. To date the credit union has funded about $40,000 in the loans for 30-35 members. The term on all the loans is 12-months. At the low interest rate of 3%, the monthly payment figures out to about $127 which Taylor says "fits into anyone's budget. Instead of shelling out $300-$400 a month which the members would have paid without the loan, they have a more reasonable payment they make to us." Taylor said the credit union has even received support for the loans from area fuel dealers. MHFCU advertised the loan in the local newspaper, and some of the dealers have been sending their customers to the credit union for the loan – MHFCU has a community charter. "The 3% interest rate is less than what the credit union would earn on the money if it was sitting in our overnight funds, but we'd rather see that money working for our members," said Taylor. Howard Dunn, president/CEO, University CU, Orono, agreed with Taylor. "For the member, this spreads the cost of heating their home out over the course of the year, reducing the economic burden of having to pay for this cost all at once." St. Croix FCU, Baileyville, is one of the newest Maine CUs to offer members fuel loans having begun doing so Jan. 10. The $50 million CU is offering its more than 10,000 members the loans at 0% interest and a maximum $500. Senior Vice President Public Relations and Marketing Linda Howe said that amount covers about a month-and-a-half of fuel at the going rates. Loan checks are paid directly to the member's fuel company. Howe said the idea of offering a 0% loan came from an article the credit union's executive vice president read in a credit union publication about a credit union in Louisiana that did 0% loans to members to help them after Hurricanes Katrina and Rita. "January is a tough time for people in Maine because of the weather. When we brainstormed what we could do to help them, we came up with our 0% fuel loan," she explained. While St. Croix's fuel loans have a five-month term, Howe said since many members are seasonally employed, they can elect to begin repaying the loan in May. Those that choose that option have to repay the loan by September. Maine Credit Union League Governmental & Public Relations Manager Jon Paradise said what credit unions are doing has not gone unnoticed – a number of media outlets including TV, newspaper and radio, have focused on the assistance these credit unions are offering. "The dramatic rise in energy costs has put a number of Maine people in difficult financial positions and, as a result, many credit unions are responding to help meet the needs of their members. As member-owned, not-for-profit cooperatives, credit unions operate to serve the needs of their members, and right now there is a tremendous need to provide assistance to help members afford to heat their homes this winter. In most instances, credit unions are making little or no money on these special loans.this highlights some of the differences between how credit unions operate from other financial institutions," he said. -

[email protected]