WASHINGTON One week into sequestration, credit unions that serve federal employees affected by the across-the-board government spending cuts say they are still only seeing limited demand for assistance at best from their memberships.
“We have had approximately 100 inquiries, but that has manifested itself in less than a dozen applications for actual loans,” said Peter Sainato, CEO at Justice FCU, whose credit union is offering members low-interest loans to cover paycuts, along with skip-a-pay options, financial counseling and more.
Sainato explained that because furloughs have not yet begun, the delay in demand is to be expected. “It hasn’t really hit the federal employees yet. That will most likely happen beginning in April, so we expect it to pick up more once the furloughs become a reality.”
Similarly, Treasury Department FCU CEO Alfred Scipio said his credit union has received a number of inquiries about available assistance, but no loan applications yet. He expects those to pick up once employees begin to receive furlough letters in the next week or so.
“Nobody has been impacted yet,” pointed out Scipio. “What we believe people will need as they are impacted is enough money to cover one or two of their important items so that they can budget properly to get through the entire furlough period. When you’re impacted by something like this it takes a while to adjust. We’ve designed a program to help people adjust to the new realities of their paycheck.”
Both CEOs said they feel they have adequately promoted the offerings including branch signage, online marketing, statement inserts and more and neither said they expected to increase promotions of them as the month continues and furlough days get closer.
Sanianto said that while the response so far has been tepid, he was confident that it will increase. “If there’s no agreement in Washington over these cuts and the sequestration remains in place, we expect the volume to increase consistently over the period until we get to the end of the fiscal year at Sept. 30.”
Scipio, on the other hand, was more positive.
“I’m more optimistic now that this will be short term instead of the tenure that they originally put out there, because I think that they’ll work out a good deal at some point in the next month or so,” he said. The executive added that politicians on both sides of the aisle seem to have realized that across-the-board spending cuts will not solve the problem, and a more comprehensive effort is needed than what the sequester cuts will cover.
“They understand that it’s going to be painful to a lot of people, and if you’re going to create pain for a lot of people, you might as well do something that’s going to impact the problem for a longer period of time.”
