At press time, the federal government shutdown was in its second full day. Reports are mixed regarding how long it could last—some still maintain it will be over in a few days, while others insist the political impasse could drag on for weeks.

While the majority of Americans have expressed displeasure with the current state of affairs, it's federal employees who are the unhappiest. Obviously, the loss of pay is problematic. However, the nature of federal employees—many served in the military and keep their household budgets as orderly as their high-and-tight haircuts—makes the uncertain outcome even tougher to bear.

Good thing so many of those folks are credit union members. My email inbox at Credit Union Times has been flooded this week with releases from credit unions detailing assistance they can provide to affected federal employees and contractors that serve affected agencies. Some releases were disappointingly self-serving and offered nothing new. However, most credit unions are going above and beyond the call of duty in offering members flexibility with loan payment due dates, waiving late payment and overdraft fees, and for some, even covering missing paychecks.

Scott Credit Union in Edwardsville, Ill., is one such credit union. The $930 million institution will allow affected members to borrow 100% of their most recent net two-week pay, presumably interest free or at a very low rate. President/CEO Frank Padak told CUNA his credit union will help members cover their next paycheck or two and give them up to six months to repay the amount.

The $5 billion VyStar Credit Union in Jacksonville, Fla., has also stepped up to the payroll plate, processing Tuesday's direct deposits for federal workers as if the credit union received the government funds. The credit union will also cover Oct. 15 payrolls if needed and is promoting emergency loans, increasing credit line limits, expediting credit card approvals and waiving penalties on certificate withdrawals.

Wowsah! Just think of all the fee income these credit unions are leaving on the table in the name of service. While those of us who live and breathe the credit union philosophy think nothing of that, in our profit-at-any-cost culture, these gestures are really remarkable.

I'm sure many bankers are working with their affected customers, too. However, when I visited the webpages of the Independent Community Bankers of America and the American Bankers Association, I couldn't find one single news release bragging about such efforts. That is a stark contrast to CUNA and NAFCU's websites, which provide example after example of how credit unions are stepping up to the plate to help members affected by the shutdown. NAFCU even created an entire Web page that, credit union by credit union, lists assistance available to members.

Here in Washington, we tend to think the shutdown primarily affects our region. However, the Washington Post published an interesting infographic in today's commuter paper that reveals our nation's capital ranks No. 4 on the list of metropolitan areas with the highest percentage of federal workers, which includes the military.

Colorado Springs, Colo., ranked first, with nearly 19% of its workforce drawing federal paychecks. Virginia Beach, Va., and Honolulu tied for second with 17.2% of its workforce in the federal category. Other metro areas on the list include El Paso, Texas; Ogden, Utah; San Diego; Augusta, Ga.; San Antonio; and Charleston, S.C.

That list really drives home how much the shutdown will affect the entire country. Not only will federal workers in those cities see their incomes temporarily drop, the retailers that serve them will, too. The shutdown has already impacted my household budget; my self-employed husband's federally employed clients will have to delay paying their invoices. Our Christmas travel arrangements will have to wait.

While credit unions will walk away from additional late fees and overdraft charges, they could see an increase in credit card balances as federal workers and those who depend upon them turn to temporary financing. However, I have a feeling most will do without rather than increase debt loads, at least for now.

Personally, I'd rather take a wait-and-see approach to our holiday travel plans and delay purchasing airfare rather than incur interest charges … but then again, I've been fed a steady diet of thrift since my first credit union internship in the late 1980s. I might not be typical of your members.

Still, credit unions have a golden opportunity to further position themselves as consumer-friendly financial service providers as bankers stand silent during the shutdown. Judging by how many press releases I've received this week, plenty of credit union marketing executives see this opportunity, too. Let's hope it pays off in real dollars down the road.

Instant Insights /

Government Shuts Down, Credit Unions Step Up: Executive Editor's Column

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