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How CUs are Assisting in the Battle of the Budget

They may comprise the greatest fighting force in the history of armed services, but today's U.S. military find themselves to be no different than their fellow Americans when it comes to Congress and the laws governing the federal budget.

Today, concern in Washington has never been greater for cutting waste and reducing spending; however, trying to find a way to carry it out in a way that's acceptable to democrats and republicans alike has proven to be quite a futile venture. As a result, sequestration is now part of everyone's daily experience.

"During the first week of June, employees subject to furlough began receiving their official 'warning order' notifying them of the Department's potential to furlough," noted Arty Arteaga, president/CEO of the Defense Credit Union Council (DCUC), which represents the interests of credit unions operating on military installations worldwide.

For those impacted, the furloughs will amount to a 20% cut in pay over a period of 11 weeks.

Frank Padak, president/CEO of Scott Credit Union in southern Illinois, expressed hope that the government can find some more funds or adjust the rules to shorten the furlough time frame.

"I don't know too many families that can afford a 20% cut in pay for 11 weeks without some repercussions," he said.

 

'You're Not Alone'

Padak confirmed that Scott Credit Union has been receiving inquiries on loans to help out members, and just like all of his DCUC-member colleagues, his credit union is taking a number of steps to ensure that the members know they won't be facing this challenge alone.

"If you already have a loan with us, we'll do a payment extension so we can move out that payment 30 or 60 days, allowing you to essentially skip a payment."

He also said his credit union is ready to loan at 0% interest, up to 100% of the previous month's pay. "So even though they might miss 20% of their salary, we're willing to loan up to 100% at no interest for 60 days."

Such measures can also be found at Service Credit Union in Portsmouth, N.H. CEO Gordon Simmons counted a wide-range of services now available for his members, from a 0% sequestration loan to penalty-free early withdrawals on certificates of deposit and a 90-day loan payment deferral.

"Should sequestration remain in place for a prolonged period of time, irreparable damage will occur to some individuals' credit ratings and their quality of life. We can help our members avoid these consequences, but only for a short run and that's exactly how long we're hoping the sequestration will last," he said.

Denise Floyd, president/CEO at Fort Sill FCU in Oklahoma shares a similar perspective. Floyd says the military and their families are holding onto hope that the furloughs are not a forever deal and Congress will repeal the sequester-related reductions.

In the meantime, Floyd is insistent that her credit union will be there for its members. "We will do whatever we can to help them at this point. This is nothing of their doing. They've done the right things. So we're going to help them."

 

Open To Discussion

Patricia Kimmel, CEO at Belvoir Federal Credit Union reports, "There's nothing that we're not open to discussing if someone is impacted. We have a lot of families where both spouses work in a government job, so we're not just talking about one income that's going to be impacted. We're talking about a double whammy."

For Kimmel and her credit union team, a double impact on a family's salary could be disastrous. "If it does happen," she says, "I think we're going to see difficulty in making a monthly payment or two and not more than that. At least, that's our hope."

Having the flexibility to respond innovatively and standing ready to meet a member's needs no matter what-can be viewed as the rallying cry at all credit unions serving the military, the Department of Defense and their families, and such a commitment comes as no surprise to Arteaga.

"For more than 80 years credit unions have been operating on military bases and supporting the DoD establishment. We have history ... and with that history of outstanding and reliable support comes trust; a trust that has developed over the years because of our integrity, our loyalty, and our commitment to serve."

He continued by emphasizing, "Our member credit unions are always front and center when it comes to helping people; not because they have to, but because they want to. It's in their DNA. It's what they do best. They hold themselves to a higher standard and frankly, are proud to do so. No one needs to do that for them."

 

 

Walter Laskos is a freelance writer and PR specialist who works with numerous organizations. For info: waltlaskos.com.

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