Pennsylvania credit unions coming to the rescue of state employees whose pay is caught up in the state budget crisis began disbursing millions in loans today.
By the latest count, 25 CUs have now established special programs to help the workers through low- or no-interest loans, skip a payments or other vehicles, said the Pennsylvania Credit Union Association. CUs have won high praise from lawmakers and the state’s Democratic governor, Edward Rendell, for being “socially responsible.”
“We are today seeing draw downs from the 33,000 of our state employee members who are eligible to apply for our $1,000, no interest loans,” said a spokeswoman for the $3.4 billion Pennsylvania State Employees CU of Harrisburg, which began preparing in May. The state’s largest CU said it has earmarked $12 million daily for the loans on its Pa. Impasse Budget Loan product.
Under PIBL, the 0% rate is available “during the 2009/2010 budget impasse and for 60 days after the budget is signed by the governor,” said PSECU, noting also that “any remaining balance after that time will begin to accrue interest at a low rate of 3.9% APR.”