Credit unions take action to assist members affected by government shutdown
With the government shutdown showing no sign of ending soon, credit unions are demonstrating the “people helping people” philosophy for which they are known. Thousands of federal workers living in Alabama and Florida are now facing firsthand the pressure of missing their first paycheck as a result of the partial government shutdown. This standoff, coupled with the stress of not knowing when this crisis will end, has sent many folks running to their local financial institutions, desperate for assistance. Credit unions are working diligently to aid their members and communities by providing assistance.
Credit unions in heavily impacted areas have put together a variety of resources to help members stay fiscally afloat while waiting to go back to work. These offerings range from mortgage loan forbearance, waived fees for skip payments, expedited personal lines of credit and HELOC loans, consumer and credit card payment deferment, emergency short-term and no and low-interest loans, refinancing of auto loans with no payment for up to 90 days, and financial counseling on how best to navigate this incredibly difficult time.
AL.com reported there are 5,494 employees at agencies without funding and subject to the shutdown in Alabama. Florida has 138,872 federal workers, including 13,061 in the nine agencies that would be affected by a shutdown, according to Labor Department figures from June of 2017 that were compiled by Governing Magazine as reported by the Herald Tribune.
A summary of assistance for members during the government shutdown:
- Waiving fees for skip payments
- Working with members that don’t qualify for skip payment under our normal guidelines and offering up to 90 days’ deferment
- Emergency loan with relaxed underwriting guidelines
- Loan amounts: 1 month gross income, $500 minimum, $5,000 maximum
- Terms: up to 24 months
- First payment: Allow up to 60 days for first payment
- Rate: 8.25% All Tiers
We continue to monitor the situation and will make changes as necessary to help members through this challenging time.
America’s First Federal Credit Union is ready to assist our members that have been affected by the current government shutdown. If you have been furloughed from your current employer, you may be eligible for assistance. Assistance options range from temporary reduced payments to short-term payment deferments. In order to qualify, you will need to provide the following documentation to one of our 19 branches or Call Center:
- Letter of hardship explaining the need for assistance
- Updated loan application
- Most recent paystubs
- List of your current debts, including utilities, insurance, and other necessities.
Avadian Credit Union is offering furloughed federal government employees loans at 0 percent APR to help pay the bills during the federal government shutdown.
“We know it’s hard to be without a paycheck, even when you think you will get paid eventually,” said Linda Cencula, President and CEO. “That’s why we have initiated this shutdown assistance loan program: to help employees of federal government agencies have access to the money they need to meet their financial obligations at no interest.”
Federal employees will be able to take advantage of 0 percent APR loans for 60 days plus an additional 30-day loan upon request if the shutdown is ongoing at that time.
Employees affected by the government shutdown wanting to take advantage of this loan offer should stop by their local Avadian branch, visit avadiancu.com, or call 1.888.AVADIAN.
“Government Employee Furlough” Loan Program
Effectively immediately, any government employee who has been impacted by the recent government shutdown and is a current member of the credit union is eligible for a consumer loan as follows:
- Funds received 60% of monthly gross income with a maximum of $5,000; (Exceptions with VP approval)
- Maximum Loan Term 60 Months;
- First Payment deferred for 90-days;
- Proof of furlough required – send the furlough letter to document the temporary loss of employment and income;
- Copy of the applicants most recent paystub to identify the monthly income.
- Interest Rates – see Government Employee Furlough Rate Sheet
- Other qualifications
- Borrower must show affordability using the income they will be receiving once they go back to work
- Borrower must meet the credit union’s credit risk parameters or obtain VP Approval.
- Any G.E.F.L.P. Applications to new members requires VP Approval.
This program will be in effect until the government shutdown has ended plus 60 days.
For existing loan members – we can have them apply for this Government Employee Furlough Loan or take a FREE skip a pay (two maximum) with proof of the furlough from their job.
Partial government shutdowns went into effect on December 22, 2018. Brevard County could experience a negative economic impact from the employment sectors impacted by cuts. The following list of agencies affected in the federal government shutdown include:
- Federal Law Enforcement and correction officers from the FBI
- Drug Enforcement Agency
- Bureau of Alcohol, Tobacco, Firearms and Explosives
- Department of Homeland Security which include TSA employees and Coast Guard Employees
- Customs and Border Protection
- Forest Service Firefighters and National Weather Service forecasters
The current course of action is for federal employees to work without pay. However, some federal workers could be placed on temporary leave or furlough hours.
- Furloughs are a way for companies to reduce operating costs without permanently laying off employees. During a furlough, an employee does not work and does not get paid. These can be voluntary or mandatory. The difference between a furlough and layoff is that the employee continues to work a relatively consistent schedule that is interrupted occasionally by furlough days. Furloughed employees are still employed by their company, though they aren’t working or drawing income while they are furloughed. The time they are furloughed can create financial problems because they aren’t getting paid. These furloughed employees may or may not be eligible for unemployment compensation.
CCU will have members impacted so we will need to continue to meet our member’s challenges during these times of economic uncertainty. Talk to the member to determine the best course of action that will help meet their financial needs.
CCU has 3 options available to members financially impacted by the government shutdown:
- Loan modification – including skip
- Interest free loan
- Penalty free CD withdrawal
Loan Modification Option:
Parameters: Loan modification requests should be entered in Meridian Link to see if member qualifies under our normal loan application procedures. Lenders will be given additional authority to grant loan extensions for members affected by the cuts for up to 90 days and waive the fee.
Innovative Lending Program – Interest Free Loan Option:
The Innovative Lending Program approved by the Board allows us to offer interest free loans for up to one year. Any member furloughed due to the partial government shutdown may qualify for this loan. Requests should be submitted to your manager for committee approval.
- Eligibility: any member in good standing and encountering a decrease in pay due to shutdown related furlough
- APR: 0.00%
- Term: maximum 12 months
- Loan amount: max loan amount equal to one month’s net salary (either direct deposit or pay stub for verification)
- Payment: 1st payment may be delayed until furloughed worker returns to work – up to 90 days
- Requirements: proof of furlough and decrease in income are required
- Standard underwriting guidelines apply
CD Penalty Waiver Option:
CCU will allow members affected by the government cuts to withdraw funds from their CD and waive any penalty fees we would normally impose.
- Member can withdraw all funds and close CD
- Member can withdraw any amount needed as long as $1,000 balance remains to keep CD open
Community First’s greatest concern is our members and how we will assist those affected by the government shutdown. We had hoped a timely resolution would be reached, but since that has not yet occurred, the credit union is making the following accommodations for those affected:
Requests for assistance initially began with Collections handling all inquiries. The credit union’s existing programs solved many of the short-term needs of members:
- Skip-a-pay program that provides members the ability to skip a scheduled payment twice during a twelve-month period
- Instant line of credit increases to members with existing lines of credit
- Instant credit card line increases to members with existing credit card limits
- New unsecured credit requests for members with direct deposit, for amortizing personal loan, line of credit or credit card, based on previous credit history and relationship with credit union
- Penalty free early withdrawal on certificates of deposits of partial or full withdrawal
Now that the shutdown is still continuing, beginning tomorrow the credit union will also offer a Government Shutdown Relief Loan:
- Members who are federal employees affected by the shutdown and receiving direct deposit at Community First will be offered an interest-free loan for a term of 45 days. Upon receipt of the first direct deposit after the shutdown, the loan will be repaid in full.
- Members who are federal employees affected by the shutdown but not receiving direct deposit at Community First will be offered a short-term loan based on their most recent paystub gross pay. An advance equal to 75% of gross pay will be provided; depending on dollar amount and term of repayment, the rate will be from interest-free to 7.99%. The max term will be 18 months and the max amount will be $5,000.
We will also work with members having first or second mortgages on a case-by-case basis.
Jax Federal Credit Union was founded to be a financial partner to government employees. We understand the impact this may have on our members and have the following offers in place for affected government employees.
- 60-day Skip-a-Pay Extensions on loans and VISA payments.
- 30-day Extension on a JAXFCU HELOAN or First Mortgage.
- 0% Short Term (60-day) Personal Loans to be repaid with back pay. (Amount based on payroll direct deposits)
- Up to $3,000 penalty free withdrawal from a JAXFCU certificate.
Standard offers that may help affected members include:
- VISA Balance Transfers are well timed to avoid January payments.
- Refinance auto loans held elsewhere and have no payment for 90 days.
- Apply for a personal line of credit or home equity line of credit.
We have also added a page to our website encouraging members to reach out to us for personalized services: https://www.jaxfcu.org/december-2018-partial-government-shutdown/
For members with current Legacy loans, there are options that may help during this time, including payment extensions and refinancing to reduce payments. Contact Legacy at 1-800-828-0103 or visit any branch to discuss your options.
Legacy’s Lifestyle Loan offers our members No Payments for 90 Days. This personal loan helps furloughed employees to meet their family and financial obligations.
Legacy hopes that these options for financial assistance will reduce the stress on our impacted members during the Government Shutdown.
For more information on ways Legacy can assist you during this time, please call us at 1-800-828-0103 or visit us at any branch.
“We have been monitoring this closely and to date have had only one member who has contacted us asking us to do a loan extension. They indicated that was the only thing they needed at this time. We are committed to help members through this process but are handling it on a case-by-case basis,” Caryl Greene, President/CEO.
North Alabama Educators Credit Union is assisting members by:
- Offering a free skip-a-payment on loans
- Reducing loan payments to interest only
- Offering a low cost 5% APR 90-day note up to 1 times normal Gross Monthly Income
- Waiving courtesy pay fees
- Up to $4,000 0% loan for any government furloughed employee (amount is based on normal paycheck amount)
- Will consider loan deferments during the shutdown
- Waive early withdrawal penalties on any certificates
The member has to provide a copy of the furlough notice to qualify.
PriorityONE is here to help those members affected by the Government Shutdown by providing assistance during these challenging times.
Like our mission states, our credit union is all about people helping people.
For those members impacted, we are offering:
- CD early withdrawal – no fees or penalties
- New Loans – no payment due for up to 90 days*
- Existing Loans – extension for up to 60 days with no fees or penalties
Call or stop by any branch to find out more.
“Life Line” Loan:
- Maximum loan amount = $2500
- Flat interest rate of 5% (will not be risk priced)
- Auto pay discount not available
- Maximum term = 48 months
- No payments required for first 90 days (interest will accrue and will be taken from 1st payment)
- Credit life and disability insurance available
- Must have documented verification of furlough, a commonly used document is “SF-50, Notification of Personnel Action.”
Mortgage Loan Workouts:
- We have a variety of mortgage loan workout options, refer to Member Solutions as usual
- When appropriate, a due date extension may meet the member’s needs. Evaluate the request as normal to accommodate the member’s needs.
Share Certificate withdraws without penalty:
- Early withdraw penalty may be waived
- Must have documented verification of furlough
- Contact Deposit Services for assistance if needed
“This is not at all a large member base for us, but as in any challenging situation we are here for our members. We take this on a member by member basis so we’re assisting the member with just what they need. It may be an extension on a loan payment, a small loan to get them through, an increase on a credit card limit or just some help with re-budgeting. ‘Not for Profit, Not for Charity, But for Service, People Helping People, ‘ Michael Welch, President/CEO University Credit Union, Miami FL.
For members with loans with VyStar, we have a short term deferment for mortgage that is a quick approval and turnaround with a special “Government Shutdown” code already in place, and we are prepared to work with members on Consumer loans through Collections to skip payments or make other arrangements, as needed. For members who need extra cash to cover expenses, we have our current suite of products as well as the option of offering a 0% Emergency Relief Loan. Also, we have expedited approvals for credit cards and line increases as well as the ability to offer penalty-free early withdrawals on certificates, should we decide to offer that.
Here is what you can expect:
- Loan Options: If you are a federal government civilian employee or member of the military, have direct deposit with VyStar Credit Union and are impacted by the government shutdown, you may qualify for an emergency loan. Please contact us to discuss the assistance we have available for you.
- Alternative Options: We also have other loan products available depending on individual needs and circumstances, such as Pay and Save Loans, expedited line increase on current Line of Credit loans, and Signature Loans.
- Loan Assistance: We are prepared to work with you on any VyStar loan payments. If you have an existing VyStar loan(s) and/or credit card and would like to discuss a potential loan deferment, please contact VyStar’s Call Center at (904) 777-6000 or 1 (800) 445-6289, option 3.
- Credit Cards:We provide expedited approvals for a new credit card or a line increase for your existing VyStar Credit Union credit card.
- Penalty-free Early Withdrawal on Certificates: If you need to redeem a VyStar Credit Union certificate prior to its maturity, we’ll waive any early withdrawal penalties.