HARRISBURG, Penn. — This state's budget impasse has members lining up to take advantage of CU low- or no-interest loans to bridge the gap until the next paycheck.
A budget agreement was not reached in Pennsylvania by the June 30 deadline, and the first paychecks affected were those issued by the state on July 17 and 24. The $3.4-billion Pennsylvania State Employees CU has stepped in with a 0% loan that provides members with up to $1,000 per biweekly paycheck. The no-interest deal remains in effect 60 days after a budget agreement is reached, after which the rate moves to 3.9% fixed on the existing balance at that time.
At press time, the state was moving closer to passing a budget, sources suggested.
Barb Bowker, PSECU VP of marketing, said the credit union prequalified 30,000 members before June 30, and 3,300 members have advanced the loan for a little over $2.9 million at press time. "Things went very smoothly on the 17th. On that paycheck some of the state's workers were paid for seven days and were short three. But the real interest in the loan could come with the July 24 paycheck," Bowker told CU Journal last week, "When some workers will be paid for only two days."
PSECU will be ready, according to Bowker. As it did in preparation for July 17, PSECU made sure lobby and call centers were staffed accordingly on July 24, and hours were extended. The 350,000-member PSECU, which
In Titusville, the $14-million Oil Country FCU is making available a 4.9% signature loan, shared CEO Marilyn Beers. "We have had ten members come in for a loan that will be given for up to four paychecks. We're giving members the opportunity to pay it off in a lump sum once they get their back pay or stretch out payments through December."
The $175-million AmeriChoice FCU in Mechanicsburg is extending a $10,000 line of credit at 3.99%, said CEO Kipp Stecher. "We'll give them what they normally get paid every two weeks, up to $10,000. We've had 21 applications so far and have booked 12 loans to date."
Belco Community CU in Harrisburg, is offering the same 0% deal as PSECU, and the 48,000-member credit union has had 82 takers so far, said CEO Lonnie Maurer, who reminded that keeping money in members' pockets will have a positive impact on more than state workers. "If state workers don't have money, then other businesses suffer. If businesses don't get that revenue stream, then they can't pay their own workers. It could have a big effect on the entire economy in Pennsylvania."
