HOLLYWOOD -
The cost of the strike to the Los Angeles area economy is estimated at more than $20 million a day, according to a report on CNNMoney.com.
And despite some deals being reached independently between the Writers’ Guild of America, West and MRC, Media Rights Capital and Worldwide Trousers, the company that produces the David Letterman show, no one seems to be sure when the strike will end.
What is making some credit union officials nervous is the repercussions of a strike lasting several more months or longer.
“I think the industry will be shut down if the strike goes on another three months,” said Musicians’ Interguild Credit Union CEO Marc Jacoby.
The $78-million CU is making a pre-emptive effort to alleviate the effects of the strike by offering its members signature loans of up to $5,000 per month for as long as three months, with a rolling two-to three-month first payment deferment.
Jacoby likened the loan to a line of credit that is “open ended,” noting that although the loan limit is technically $15,000, that limit is not written in stone. “It depends on how long the strike goes on,” he said.
The signature loan is available at 11.5% APR but can go as low as 11.0% if the member opts to open a checking or savings account at the same time as the loan.
Additionally, members must provide proof that they were out of work due to the strike and show that they were working up to the time of the strike.
MICU also offers a payment deferment option to members who have already taken a loan out but are experiencing problems making payments due to the strike.
Jacoby said that at first, not many members were signing up for the loan despite a letter that was mailed outlining the program, but he said the CU is experiencing a gradual uptick in applications as strike funds become more depleted.
“We’re starting to hear some chatter that the strike funds are getting low, but we don’t know,” he said. “The loans will only keep your lifestyle at the status quo but we’re optimistic that the strike will end soon and people will be back to work soon.”
First Entertainment Credit Union vp of marketing, Roy MacKinnon said that there have been no obvious effects to the $567-million CU’s bottom line other than some members requesting a “skip-a-payment” and that no special loan programs have been offered due to the strike.
But MacKinnon agreed that the repercussions of a strike lasting three to six more months could affect the CU’s ability to make new loans if it starts experiencing a large number of delinquencies and foreclosures from members unable to make payments.
So far that hasn’t happened yet. MacKinnon attributes the lack of interest in special loans at this time to what he saw as a well-prepared strike plan. He added that if there is a need, the CU is ready to act.
“We have an emergency loan program in place, and some members are concerned, but we haven’t offered it yet,” MacKinnon said.
He added that what is also worrisome for members and the local economy is that four major studios have canceled dozens of writers’ contracts due to the writers’ strike.
20th Century Fox Television, CBS Paramount Network Television, NBC Universal and Warner Bros. Television reported that they have terminated development and production agreements, according to the Los Angeles Times.
“If you ask me then (three to six months from now), it really could be a 360 degree turnaround from now,” he said. “It’s too early to tell.”
AFTRA-SAG Federal Credit Union offers a personal signature loan of up to $15,000 at 9.40%APR. At presstime, officials were unavailable for comment.
For More Information
www.musiciancu.org
www.firstent.org
www.wga.org (Writers Guild of America, West)
www.aftrasagfcu.org
