WASHINGTON–As the partial government shutdown stretches into 2019, new estimates suggest as many as 800,000 people may be affected and will miss regularly scheduled paychecks. For many, credit unions may be the only means of assistance, although some non-profit groups are also exploring ways to help.
The U.S. Office of Personnel Management, which handles human resources for the government's civilian workforce, has advised thousands of employees who won't be paid during government shutdown to reach out to creditors in order to work out alternative payment schedules. OPM has even released sample letters it suggests federal workers affected by the shutdown use to ask for help from mortgage lenders and landlords.
According to numbers compiled by Senate Democrats, approximately 420,000 federal employees are being required to work without pay, while an additional 380,000 have been sent home, or furloughed, without pay. The shutdown is primarily affecting the departments of Homeland Security, along with the Departments of Justice, State, Interior, Agriculture, and Housing and Urban Development and other parts of the government, as a deadlock over the funding of a wall along the border with Mexico continues between President Trump and Congress.
The federal government employs approximately 2.1 million people in all.
About NCUA and CFPB
As independent agencies, NCUA and the CFPB are not being affected by the shutdown. NCUA did issue a statement saying credit unions should plan to respond to members’ questions and consider other actions, such as:
- Ensuring policies provide flexibility to respond to members’ financial needs.
- Preparing for service interruptions if the shutdown affects access to credit union offices located on federal property.
- Prudently working with affected members, including providing advances to individuals receiving direct deposits from the federal government.
- Developing contingency plans with respect to participation in government programs that may be affected by the federal government shutdown.
- Communicating response plans to members, staff and volunteers in a timely manner
Fort Knox FCU Offers Help
Credit unions continue to step up with offers of assistance, the most recent being Radcliff, Ky.-based Fort Knox FCU, which is offering affected members a personal loan with no payments due for the first 90 days, or the option to withdraw up to $10,000 of certificate deposits early without penalty by visiting their local branch.
FKFCU is also offering the opportunity to extend the payment due date on their current loans by 30, 60 or 90 days, depending on need as determined by the credit union, or applying for a new low-rate VISA credit card or instant cash line of credit to ease financial stress during the shutdown.
“Supporting members and the broader community during the partial government shutdown is part of our ‘people helping people’ philosophy,” said Ray Springsteen, CEO of Fort Knox Federal Credit Union, in a statement. “During the 16-day shutdown in 2013, we provided 200 emergency loans for those impacted. As the largest member-owned financial institution in Kentucky, we want to help hard-working Kentucky families through this shutdown as well.”
Also Offering Assistance
Other credit unions that have offered assistance to furloughed federal workers include:
- Keesler FCU in Biloxi, FCU., which is offering a payday advance for members who have federal payroll direct deposit established with the credit union.
- In Maine, Northeast Credit Union has announced the availability of several special programs to assist federal workers, including deferments for up to three months on NECU consumer loans, a special low-rate on a 12-month Signature Loan with deferred payments, and continuation of direct deposit pay at the member’s request.
- In Chantilly, Va., Justice Federal Credit Union is offering special assistance in the form of an unsecured, low interest rate loan and deferred payments to members of the Department of Justice and the Department of Homeland Security and other members furloughed as a result of a shutdown. Members with a minimum of six months of membership with Justice Federal may apply for a Special Assistance Loan up to member’s net pay, not to exceed $3,000 at an annual low rate of 2.94% for 24 months. The actual loan amount is based on the member’s net pay deposit, with direct deposit required. Members may opt to defer their first loan payment for up to 90 days. In addition, existing members in good standing with a Justice Federal consumer loan, or credit card may request to defer payments, and request assistance with a Justice Federal First Mortgage Loan.
- In Massachusetts, Hanscom FCU, which serves Hanscom Air Force Base, said some of its members are eligible for a “LifeLine loan” during the time the government is shut down and paychecks are not being issued. In addition, Hanscom FCU said it will waive penalties for premature withdrawals on term share certificates and allow qualified members to skip consumer loan payments with no fee. Members whose paychecks are affected by a shutdown or a furlough are also able to apply for a 0% APR LifeLine loan with a 60-day term, up to 100% of one’s net monthly pay or $5,000, whichever is less. For those needing more than 60 days to repay, the loan will be converted into installment payments over a 12-month term at a low fixed rate of 8.49% APR.
- The world’s largest credit union, Navy FCU, has announced a plan to cover direct deposit for eligible members during the government shutdown. Coverage for this loan begins if a shutdown extends into the next pay period and pay is interrupted. The credit union is offering assistance to Federal government employees and active duty members of the Coast Guard whose pay has been disrupted by the shutdown, and have an established direct deposit account. Navy Federal will also continue to accept registration for the program until three days after the scheduled pay day.
“Our members deserve peace of mind during a government shutdown, and eligible members can register to get some relief,” said Tynika Wilson, senior vice president of debit card and fund services at Navy Federal, in a statement. “Public service is a defining characteristic of our membership, and this is the right thing to do.”