WASHINGTON Credit unions all around the country are preparing special loan deals and other financial assistance in preparation for the massive federal layoffs and budget cuts known as sequestration expected to take place tomorrow as the stalemate between President Obama and Republicans in Congress continues.
“We are here to help people meet their financial needs,” said Joe Mirachi, president of Florida’s Kennedy Space Center FCU, which has created an interest free loan for qualifying members who may be affected.
Scott CU in Illinois is offering a Sequestration Loan at 0% APR and no payments for 60 days to any member who is furloughed from his or her government job due to the sequestration.
“If Congress does not act to prevent it, many of our members could face economic hardships,” said Frank Padak, president of the $600-million credit union. “We stand ready to help our members, especially those who work at Scott Air Force Base and could be out of work or are working fewer days each week at reduced pay. We are hopeful that this can be avoided.”
Scott CU’s special loan will offer members the opportunity to borrow 100% of their most recent monthly net pay up to $5,000 at 0% for 60 days. They will not have to make any payments for the first 60 days and will have one year to repay the loan. The loan rate will be set at 4.75% Annual Percentage Rate after the first 60 days.
Northwest FCU, based in suburban Virginia where hundreds of thousands of government employees could be furloughed, will provide loans up to $10,000 at 0%. Should the government sequestration take effect, the special rate will be available for members who meet minimum qualifications for a period of up to 90 days after their furlough period ends. Northwest will waive early withdrawal penalties on any CD for members who may need immediate access to their funds.
Virginia’s Justice FCU is offering all employees from the Department of Justice and the Department of Homeland Security 0% loans up to $10,000 for 60 days. After that, the rate will convert to 4.90% and the term will be 24 months. The loan amount will be based on the member’s net pay deposit. In addition, members can delay their first loan payment for 60 days if desired.
Justice FCU members with existing consumer loans or credit cards may request one payment deferral per loan. Justice FCU said it will make every effort to work with members who may be struggling. “We will be there for our members during this financial crisis,” said Peter Sainato, president of the $550-million credit union.
South Carolina’s CPF FCU is offering a one-time-only, unsecured personal loan equal to one month’s pay, up to $2,000 at 3% APR with no payments for the first 90 days, to members who are directly affected by furloughs and have direct deposit.