WASHINGTON–The partial shutdown of the federal government shows no signs of being resolved soon, and should it last through month’s end many credit unions will see members taking advantage of the various relief offers being made.
More than 400,000 federal employees have been furloughed without pay, primarily in the departments of Homeland Security, Justice, 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.
In the meantime, credit unions all over the country continue to offer assistance to any members who might not receive a paycheck.
The shutdown will not affect NCUA, which is an independent federal agency and will remain open (but closed several days this week for the Christmas holidays).
The agency 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.
“Consistent with safety and soundness, credit unions may want to consider offering special programs to assist impacted members who need short-term loans, create loans with special terms and rates, or offer payment flexibility,” the agency said, urging CUs with questions to review its Letter to Credit Unions, 11-CU-05, “Planning and Preparedness for a Potential Government Shutdown,” which provides guidance in the event of a government shutdown.
Similarly, the Consumer Financial Protection Bureau will also not be affected by the shutdown.
CUNA’s chief advocacy officer, Ryan Donovan, issued a statement saying. “CUNA is actively engaged with legislators and other policymakers as the situation evolves, and we hope to see this resolved soon.”
CUs Offering Assistance
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.”