CHICAGO — More than 60,000 state workers in Illinois may be eligible for interest-free loans from the state's credit unions if legislators can't solve a budget impasse and state payrolls aren't issued on July 15.
Nearly 10 days after the state's fiscal year ended, Illinois lacks a budget agreement, meaning the state won't be able to pay some of its bills, including some state employees' wages.
Participating CUs will decide who is eligible for the loans, though loans cannot exceed 50% of pay and will remain interest free until 30 days after payrolls resume. After that 30-day period, a 9.9% interest rate will apply.
The loans are being offered through the Treasury Office's linked-deposit program, and as much as $50 million will be made available. The Illinois CU League, along with Credit Union 1, helped create the program with Treasury, and recruited other CUs to participate.
Tom Kane, the recently appointed president and CEO of the Illinois league, said that not only does the program stick with the "People Helping People" philosophy that credit unions espouse, but the partnership with the Illinois state Treasurer's office "will provide even more resources to help [members] weather the budget impasse."
E.J. Donaghey, CEO at University of Illinois Employees CU, credited the treasurer with helping provide ways to assist Illinoisans impacted by the impasse. "As a longtime supporter of credit unions and advocate for the people of East Central Illinois, he has consistently demonstrated a proactive approach to helping others."
About three million members are served by Illinois' 306 credit unions.
