California's CUs Again Step In To Help Unpaid State Workers

More than 2,000 state workers have gone without paychecks since July 15 due to the annual squabble over California's state budget. Some of the state's credit unions are trying to make a difference for members affected by the impasse by offering interest-free loans.

Jim Harris, executive VP for The Golden 1 CU here in the capital, noted that the state legislature has missed the July 1 deadline for a new budget in each of the past 10 years. Typically, it is the staff workers in the offices of the state's Assembly and Senate members who do not get paid while the budget is hammered out.

"There has been a different wrinkle each year as to the implications, and how long it lasted," said Harris. "We have learned to react quickly, figure out what is in the best interests of our members and act accordingly."

The Golden 1 has issued 2,500 loans for a total of $13.5 million to state workers since July 15. Harris said one state employee might open multiple loans, so it is difficult to estimate the exact number of members participating.

The $650-million, San Bernardino-based Arrowhead Credit Union, which serves 125,000 members, also is helping affected state employees with 0% loans.

Anne Benjamin, Arrowhead CU's senior vice president, told The Credit Union Journal approximately 15% to 20% of the CU's members are state employees, and just under 100 people are participating in the loan program.

"It's not so much about the numbers, it's the fact they know we're here," she said. "Good member service means putting your money where your mouth is and sticking by the state employees."

Benjamin said knowing an interest-free loan program is available alleviates the fears members may have. She said she has counseled some state employees who are curious where the budget fight is going.

"This has happened frequently in my 25 years, and members need you to support them when they have needs," she said.

Arrowhead CU said nearly 250,000 state employees have received only a portion of their paychecks since July 15.