Credit unions in New Mexico are doing their part to help furloughed federal workers by offering zero-percent interest rate loans and waiving savings account penalty fees for early withdrawals.
Paul Stull, president and CEO of the Credit Union Association of New Mexico, said the state’s credit unions have been preparing for a government shutdown for several years.
“We always have some kind of an emergency plan in place to help in the case this kind of thing happens,” Stull said. “There are 42 credit unions in the state, and every one of them are helping federal employees in one way or another.”
Banks in the state are also trying to be of assistance, said John Gulas, president of the New Mexico Banking Association.
Just like the credit unions, Gulas said his employer, Los Alamos National Bank, is offering its federal customers a loan on two weeks worth of their income at zero percent interest.
With the U.S. government’s partial shutdown moving into its fourth week, many of New Mexico’s federal employees are looking at a reduction in pay or perhaps no paycheck at all. According to a WalletHub report released last week, New Mexico is second to the District of Columbia when comes to the number of workers affected by the shudown.
One of the programs the credit unions are using replaces a federal employee’s net paycheck in the form of a loan at zero percent interest, he said.
For example, Nusenda Credit Union is offering such loans up to $6,000 “that can help in meeting every day expenses,” a news release says.
“For a lot of government workers, if they are members of credit unions, they can try to arrange to have their normal net pay advanced to them,” Stull said. “And now that there is a bill stating they will have back pay for their furlough, if they take an advance on their check it will be paid off once the shutdown is lifted.”
Stull was referring to a Senate bill passed last week that guarantees the estimated 500,000 federal employees placed on furlough will receive back pay.
He also pointed to the waiving of early withdrawal penalty fees on savings accounts.
“It’s not the greatest feeling in the world that you need to invade your savings to buy groceries and then get hit with a penalty for an early withdrawal, which is kind of adding insult to injury,” Stull said.
Also, loans are being extended to the workers, he said.
“Mortgages require a little bit more work, but many credit unions are working with their members either to try and advance the payment or find some way to keep them going,” he said.
Credit unions in the state offer free financial counseling to help employees hang on to their assets until the government opens back up completely.