WESTBROOK, Maine -- With the summer coming to end, credit unionsin the northeast are helping members prepare for high winterheating costs by offering energy loan and savings programs.

The County Federal Credit Union located in Caribou, Maine,started perfecting its energy loan program last year. The creditunion serves 13,000 members in Aroostook County and startedoffering a fuel assistance loan last year as soon as the energycrisis began. The loan was an unsecured personal loan for up to$1,000 at a 1% rate for a 12-month term.

"The loan was very popular, but we started to get feedback frommembers that the amount wasn't large enough," said Kenneth Hensler,CEO of The County FCU.

The County FCU bumped up its fuel assistance loan to $2,000 at2% for a 12-month term after receiving the feedback from membersthat $1,000 was not enough. "Members were coming in saying that theloan was a great assistance, but they wanted to use it to installalternative heating units like pellet stoves," Hensler said. So TheCounty FCU began allowing members to use the loan for alternativeheating, but the amount to install a pellet stove exceeded the$2,000 limit.

The credit union then decided to create a loan designed just formembers who wanted to install alternative sources of heat. The loanhas a $3,500 limit at 5% for three years. The loan can only be usedto install alternative heating, such as pellet stoves, wood boilersand enhancements to heating services because, as Hensler said, theydid not want members paying off fuel costs for three years. TheCounty FCU has since expanded the loan to be used for other energysources such as mini-windmills and solar panels.

"A lot of members have already made purchases with the loan andhave had their units installed, so the volume is starting to slowdown," Hensler said.

The County FCU still offers its $2,000 maximum fuel assistanceloan for members who need a loan just to pay for heating costs.

Originally Hensler said the credit union planned to cap its fuelassistance loan portfolio at $150,000, but the credit union sawthat it was closing in on the cap too fast and increased the cap to$250,000. Right now Hensler said that their portfolio is atapproximately $220,000.

"The fuel assistance loan and alternative heating loan wereoffered to members and nonmembers and one of the things I was veryimpressed by was the amount of new members the program brought into the credit union," Hensler said.

Personal Care America Federal Credit Union in Trumbull, Conn.,has taken a slightly different approach from offering membersassistance in the form of a loan. At the end of August, the creditunion implemented what it calls the home energy liquidity plan. Theplan offers members an option to take out a loan to help pay forheating costs and the option to open a savings account and developa savings plan. The savings account will earn a dividend rate onepercentage point higher than the traditional 12-month sharecertificate.

President/CEO John Keet said the credit union surveyed local oilprograms to help members protect costs and develop a plan to put acertain amount of money aside a month into their H.E.L.P savingsaccount. Keet said that they are also planning on sending outnotifications and letters to members with H.E.L.P savings accountsletting them know if they are not saving enough based oncalculations of projected heating costs.

"Our intent is to get folks to set up paying on a budget andkeep members away from borrowing money with credit cards and paydaylending to gain the benefit of saving and paying as the bills comein," Keet said.

The savings account is strictly for use of energy costs, Keetexplained. Members must provide proof of energy use in order todeduct funds from the account.

"Unfortunately, I don't see these high prices as a temporarything," Keet said. "This plan shows that we're expecting to helpout our members for the long haul. Personally, I paid $2.25 agallon for oil in 2007, and now I'm at $4.20. Even someonebudgeting on a regular basis is coming up short."

Taconnet Federal Credit Union in Winslow started offering an oilheating loan in June of 2006 due to the increasing price of oil.The loan at that time was for $2,500 for one year at a 5% rate.However, the credit union has also increased the limit because ofthe continued increase in oil prices for this year. Taconnet is nowoffering the loan with a $4,000 maximum for one year at 5%.

Lisa Lachance, a loan officer at Taconnet, said that when itincreased the maximum on the oil heating loan this year it hadmembers coming in wanting to use the loan to purchase pellet stovesand pellets as well.

"We have probably done about 12 loans this year, and our branchoffice in Skowhegan has done two," Lachance said. "I'm not sure ifyou saved any money this year by booking in with an oil company,because the prices have come down since June and July, but whoknows; they will probably go back up. Some of our members justwanted to feel safe knowing they have their oil for thewinter."

Sebasticook Valley Federal Credit Union in Pittsfield expandedits 0% energy loan program last year. They first offered the 0% APRfinancing loan for $2,000, payable over a 12-month term, but thisyear the CU upped the loan maximum to $3,000.

"We wanted to make the loan more attractive and $2,000 justdoesn't go very far when it comes to heating your home now," saidKelley Carter, vice president of operations at Sebasticook.

In Massachusetts, Fitchburg Federal Credit Union startedoffering a heating loan for up to $2,500 with a rate set at 5% tobe paid by Sept. 30, 2009 that can be used for any source of heat.President/CEO Barbara Goodwin said that so far the credit union hasreceived a good response and members are applying for it just incase.

After seeing a study that Massachusetts consumers could expectto spend $4.45 billion for gas and oil heat in 2009, a $469 millionincrease over 2008, Leominster Credit Union in Leominster, Mass.,also decided to offer special low-interest heating loans tomembers.

John Murphy, president of the Maine Credit Union League, saidthat Maine credit unions have always offered an energy-assistancetype loan. According to the league, this year about two-thirds ofthe state's credit unions are offering low- or no-interest loans tohelp members heat their homes.

"Credit unions take a great deal of pride in saying that theywill lend for any worthwhile purpose, and there is no moreworthwhile purpose than to keep your family warm," Murphy said."We've been in tough economic times before but now the economy andthe high cost of heating has created the perfect storm."

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