MADISON, Wis. (3/18/13)--News Now has heard from at least a dozen more credit unions that serve federal employees and are offering programs to help their members through furloughs generated by the federal government's budget cuts, or sequestration.
That is in addition to 25 credit unions from 14 states News Now reported in two articles the week after sequestration began March 1. The latest group continues to indicate the widespread impact of the furloughs. Those credit unons are helping members in Kentucky, Washington state, Virginia, Nebraska, Oklahoma, Kansas, California, and Washington, D.C.
As many as one million federal employees are expected to lose 20% of their paychecks between April and the end of the fiscal year in September. They could be furloughed for up to 176 "noncontinguous hours," which add up to 22 eight-hour workdays, according to Fort Knox FCU, Radcliff, Ky. (The News-Enterprise March 9).
Bill Rissell, the $1 billion asset credit union's president/CEO, told the publication that the Fort Knox area has more than 5,000 Department of Defense (DoD) civilians and contractors impacted by the sequestration.
As a result, Fort Knox FCU will reactivate its interest-free loan for 30 days, an offer previously used during disasters or emergencies. It will also extend furlough loans as an interest-only payment after the initial 30 days. Members can also request a temporary, interest-only payment on current loans for three months. That would reduce, for example, an auto loan payment from $325 a month to less than $55. And members can take early withdrawals of up to $10,000 from share certificates of deposit.
Education is also at the forefront of credit unions' assistance to furloughed members and the public. Three credit unions in Washington state--Connection CU of Silverdale; Kitsap CU of Bremerton and Peninsula Community FCU in Shelton--are working as a group to help the community prepare for furloughs. They are sponsoring a free community event, Surviving Sequestration: A Community Town Hall, on March 26. The event will feature speakers and a resource fair to provide attendees help addressing financial, physical and emotional needs during the times of financial change.
Their main message: Credit unions are here to help. They said they want to work with their members and community to be proactive in thinking through their household financial scenario during furloughs. The community has 16,000 local DoD civilian employees, contractors, families and others facing furloughs.
Many of the nation's credit unions offering assistance are taking the extra steps to work with individual members to customize plans tailored to the individual's circumstances.
In Alexandria, Va., Commonwealth One FCU said it "understands that each member's situation is unique and they will be affected differently by the government's action."
"The first step in the process of sequestration is for the member to understand their financial situation before they can factor in the effects of sequestration on their income," Commonwealth One said in a press release. Its free, online debt analysis tool, Debt In Focus, provides a personalized financial assessment in plain language. The credit union also encouraged members to contact itto discuss a solution tailored to their needs and established a hotline to allow members easy access.
"We're here to help our members through the challenges of facing a reduced income," said Ashley Baldeon, Commonwealth One's marketing manager. "We thoroughly support 'people helping people."
Vacaville, Calif.-based Travis CU echoed that thought. "We are here for our members and are doing everything we can to support them during these challenging economic times," President/CEO Patsy Van Ouwerkerk said in The Davis Enterprise (March 10). "Members are encouraged to visit any of our branches so that we can work with them to address any financial difficulties that these furloughs and loss of income may create."
Other credit unions reporting furlough assistance programs included: Global CU in Spokane, Wash.; SAC FCU in Bellevue, Neb.; Frontier Community CU, Leavenworth, Kan.; Transportation FCU, Washington, D.C.; and FAA CU and Tinker FCU, both located in Oklahoma City, Okla.