WASHINGTON—As uncertainty in Washington continues to grow, this time around the possibility of a government shutdown, the Defense Credit Union Council is offering advice to CUs that could be impacted if a shutdown occurs.
“The concerns about potential government layoffs and a possible shutdown are top of mind for many credit unions and their members,” said DCUC Chef Advocacy Officer Jason Stverak. “These situations can cause significant financial strain on service members, veterans, federal employees, and their families—many of whom rely on their credit unions for financial security.”
Currently, House Republicans are pursuing a stopgap measure to keep the government funded through September, looking to shore up support for the continuing resolution with less than 10 days to prevent a shutdown.
“Now, more than ever, your members need to hear from you” Stverak said. “The direct support and reassurance that your credit union provides will make the biggest difference in your members’ lives.”
How The Credit Union Can Help
During uncertain times, credit unions have an opportunity to step up as trusted financial partners, offering stability and solutions to members who may be impacted, Stevrak said. He reminded CUs of the steps many have taken when past shutdowns have occurred, and provided advice on key communication tactics:
Proactive Communication & Outreach
- Send early notifications about potential government actions and how they may affect members’ paychecks or financial situations.
- Use multiple communication channels (email, social media, website updates, branch signage) to keep members informed.
- Encourage members to reach out before financial difficulties arise so your credit union can help them develop a plan.
Emergency Financial Assistance
- Offer low- or no-interest emergency loans to members facing paycheck disruptions, ensuring they have access to short-term funds.
- Provide skip-a-payment programs for existing loans and credit cards to ease financial burdens.
- Consider waiving late fees and penalties for members who may struggle with payments due to a lapse in government pay.
Budgeting, Counseling & Member Support
- Promote financial counseling services to help members plan ahead and manage their finances effectively.
- Offer budgeting workshops and online resources tailored to managing finances during government furloughs or job uncertainties.
- Encourage members to review their savings plans and adjust automatic transfers or contributions to ensure they are prepared.
Payment Flexibility & Member Relief
- Provide temporary loan modifications to help affected members avoid defaulting on payments.
- Allow early withdrawals from certain savings accounts without penalties for members in financial distress.
- Work with members to refinance high-interest debt to more manageable payments if needed.
Reinforcing Financial Security
- Remind members that their deposits are safe and federally insured, providing stability in uncertain times.
- Encourage members to set up direct deposit for paychecks, tax refunds, and other benefits to ensure funds are received as quickly as possible.
- Offer guidance on avoiding scams and fraud, as bad actors often take advantage of financial uncertainty to target vulnerable individuals.