California's governor's race may be getting the headlines, but it's what led to that rare recall vote that is most felt by residents and which has several credit unions ready to help.
With the state's budget $38 billion in the red, many state employees are fearful for their jobs. That's one reason Riverside County's Credit Union has begun offering an "Emergency Loan Program for Government Employees," which the CU said will serve to soothe anxiety.
Officially, the emergency loan program is for county, state or school district employees who have been, or will be affected by state budget cuts. However, Mark Hawkins, the president and CEO of Riverside County's CU, said others also might be eligible for the program.
Problems Affect Everyone
"When the state is $38 billion in the hole, the problems cut across lots of lines," Hawkins said. "County, state and school district employees are the most likely targets, but there also will be others-such as people who work for a company that does business with the state. Almost anyone would be eligible."
Membership in Riverside County's CU is available to anyone who lives, works, attends school or worships in the county. The credit union is making the emergency loan program available to both members and non-members.
Asked if reaching out to non-members raised the likelihood of stepping on another CU's toes, Hawkins replied, "That's not even a possibility. We have 85,000 members, and there are 1.7- million people in Riverside County. So that means there are more than 1.6 million people who are not members but are eligible."
Riverside County's CU is offering two types of loans for workers who lose their jobs, and another loan program for those whose payroll is delayed. People who become unemployed due to the budget cuts can choose a $2,000 signature loan or a $10,000 signature equity loan. The terms of the former are: 18 months, zero-percent interest for 90 days and 9.9 percent fixed rate thereafter. Terms of the latter are: 60 months, 0% interest for 90 days and 6.9% there after.
Both loans call for no payments for 90 days. The $10,000 signature equity loan requires the borrower to be a homeowner, and a lien will be attached to his or her property for a $50 fee.
If an employee's payroll is delayed, the CU will give him or her a loan equal to the employee's most recent pay stub, on approved credit. The borrower may take out additional monthly advances for the initial loan amount for up to three months. Terms are: 0% interest for 90 days and 9.9% thereafter and amortized over 18 months.
Riverside County's CU has a history of helping during what has become an annual budget crisis in Sacramento, Hawkins said. For example, in the late 1990s, when the state was issuing warrants instead of paychecks, the credit union accepted the warrants.
Handful of Apps-For Now
The emergency loan program was formulated while the California legislature was in the process of crafting the state budget. Lawmakers chose to plug some gaps through borrowing, rather than the massive spending cuts that initially were proposed.
Because job cuts and program closures have not been as bad as feared, only a handful of applications have been filed in the first two weeks of the program's existence. But Hawkins said he believes it will prove necessary. "The cuts are real, and they will be felt. Some will be felt at a later time," he said. "We think there will be a need, and the program is important. If the need arises, we're here. If not, that's a good thing."