MADISON, Wis. (10/28/13)--An informal News Now survey of some of the credit unions that offered assistance during the federal government shutdown found that members indeed took notice of the special offerings. The level of requests varied from credit union to credit union, of course, but even many members that didn't end up in need of assistance inquired if only to consider their options in an uncertain time.
All the credit unions contacted reported that members were grateful for those options.
Associated CU, Norcross, Ga., offered 60-day, 0% interest federal employee relief loans for up to $750. In what Chad Evans, vice president of the credit union's contact center, described as a "whirlwind" of activity Associated CU granted 350 loans through the program.
"It was received very positively. Members really appreciated that we recognized that a core base our membership was being mandated a financial hardship," said Evans, "I give credit to our CEO [Lin Hodges] for seeing this through."
Miami (Fla.) FCU, offered a Furlough Relief Loan of up to $3,000 interest-free for 60 days. The credit union received roughly 100 applications and booked about $200,000 in loans, according to the credit union's CEO A. "Buster" Castiglia.
"We had a lot of federal employees that were hurting," Castiglia said. "I honestly didn't realize the depth of their need. Just a couple weeks can put people on bankruptcy's door. We were more than happy to help them."
New Mexico Federal Educators FCU, Albuquerque, N.M., offered a $6,000 loan with 0% interest for up to one year for federal workers. As of Oct. 21, New Mexico Educators CU has had about 100 members apply for loans with more "trickling in" throughout the week, said Anneliese Elrod, senior vice president strategic development at the credit union.
"In addition to feeling the pinch, there was the uncertain factor of knowing when they were going back to work and when they would be paid," Elrod said.
One member, who was not employed by the government, made it a point to stop by the credit union to say she was proud to be a member of a financial institution that offered such assistance, Elrod said
"Credit unions are founded to help their members and their surrounding communities and this loan helped to do that," Elrod said.
MCLG Family CU in Mason City, Iowa, offered a special loan allowing federal employees to borrow up to $1,000 without collateral at 4.99% interest--lower than its normal short-term small loan rate by 8.51 percentage points. It also allowed members to skip a scheduled monthly payment on loans.
CEO Matthew Chizek said that while the emergency line of credit was used by only a small handful of MCLG's 5,300 members, the cooperative got a lot of positive feedback for offering the deal.
"It's comforting to the membership that the institution is going to be there for them in good times and bad, and the vision and values are not going to change," he said. "You don't have to be a multimillionaire to be taken care of. Most of our members are blue collar, and we're proud of that."
The 35-year old Chizek, who had only been on the job for a week when the government partially shut down, said he was grateful that the board supported the program, which was quickly built as congressional budget talks broke down.
Due to a number of mergers throughout its history, MCLG's membership is drawn from a local hospital, a local cement company, and public sector employees at the city, county and federal levels.
M-O FCU, Huron, S.D. launched a "We Stand Ready…" campaign geared toward the federal and postal employees it serves. The credit union also offered penalty-free early withdrawal on certificates, 0% loans for missed payroll and deferred loan payments.
The $25 million-asset credit union received about 24 inquiries about assistance and granted eight loans. "I think members were more interested in knowing what their options were," said Tiffanie Gebhart, M-O FCU's marketing coordinator. "There's security in knowing that help is there when you need it."
Federal Employees CU, Des Moines, Iowa, offered no-interest loan and payment waivers for current loans to furloughed government workers. Mike Whittie, CEO of the $18 million-asset credit union, said about 30 to 35 members either skipped payments or took advantage of loan offers.
"Those who live paycheck to paycheck needed some assistance," Whittie said. "They couldn't go without anything. And they were very grateful," Whittie said. "It was all out of need, and as soon as they got their back pay, all the loans were taken care of."
Credit unions received extensive media attention for their efforts to reach out to furloughed employees. Mainstream press not only focused on credit unions' efforts to assist furloughed federal employees, but also carried general articles touting the benefits of credit unions.