Banks and credit unions will offer zero-interest loans and other assistance to the 200,000 California government employees who may see their pay reduced to the minimum wage as a result of the state's budget stalemate.
Bank of America Corp., the biggest U.S. lender by assets, will waive fees and offer emergency credit line increases and mortgage-payment help to customers whose California pay is cut, said Colleen Haggerty, a spokeswoman for the Charlotte company.
Golden 1 Credit Union, a lender that caters to state workers, will offer zero-interest loans to customers whose pay falls because of the stalled spending plan, according to a July 2 statement.
Golden 1, of Sacramento, the state capital, describes itself as the sixth-largest credit union in the nation with about $7 billion of assets.
Other institutions offering similar loans include Wells Fargo & Co. in San Francisco, the fourth-largest U.S. bank by deposits.
California's Republican governor, Arnold Schwarzenegger, and its Democrat-led legislature are at odds over how to close a $19.1 billion deficit for the fiscal year that began July 1.
The state has passed its budget by the start of the fiscal year only 10 times in the past 34 years.
The Schwarzenegger administration won a Sacramento state appellate court decision on July 2 upholding an order compelling state Controller John Chiang to reduce employee pay until a budget is passed.
That order affects about 200,000 state employees who work under civil service contracts, according to the state Personnel Administration Department.