The $21.4 billion State Employees' Credit Union of Raleigh,N.C. said it has banned wage garnishment as a collection tool.

North Carolina law already prohibits wage garnishment as anoption for collecting debts such as car loans, credit card debt andother personal debt items, but SECU–which has members in Georgia,Virginia and Tennessee, where garnishing wages to collect thesedebts is a legal option–has decided to eliminate the practice forSECU members in all states.

Phil Greer, senior vice president of loan administration for thenation’s second-largest credit union, cites a stressful economicenvironment as a reason for the ban.

“In this economic environment, with the increased financialstress on members from layoffs, furloughs, and cutbacks, wagegarnishment can further heighten the family crises that are nowoccurring to many fine, dependable SECU members,” Greer explained.“Wage garnishment is also highly disruptive to theemployer/employee relationship for members who are continuing towork, creating additional stress in the work environment.”

The 1.6 million-member credit union still supports garnishingwages for social obligations such as taxes, child support, alimonyand fraud, Greer said, but “working directly with the member onpersonal debts is the better, fairer choice in this economicclimate.”