By Ray Birch
WASHINGTON— Credit unions say member requests for shutdown relief remain limited, which may reflect expectations of a quick resolution—or uncertainty as workers await possible reduction-in-force (RIF) layoffs.
Media reports offered few details Wednesday beyond noting that senators have been in discussions. A potential warning sign the shutdown could drag on came from Budget Director Russell Vought, who, according to CNN, told House Republicans that some permanent layoffs could begin within “one to two” days.
As CUToday.info reported, the Senate voted 55-45 to reject the House-passed stopgap bill to keep the government funded through Nov. 21. No additional Democrats supported the GOP measure, with Sens. John Fetterman (D-PA), Catherine Cortez Masto (D-NV), and Angus King (I-ME) joining all Republicans except Sen. Rand Paul (R-KY). The measure fell short of the 60 votes needed for passage.
“Right now, it’s business as usual at Members 1st,” said Erin Hermany, SVP of consumer lending at the $8-billion credit union based in Enola, Pa. “Calls have been very limited, and I think many people are waiting to see if they’ll actually be affected, since it’s still unclear who will and won’t continue to be paid.”
She added that while the threat of permanent layoffs tied to the shutdown would be “heartbreaking,” the credit union stands ready to step in. “We’ll be here to help, whether that’s through a short-term loan, delaying payments, or connecting members with our financial education partners,” Hermany said. “Our hope, of course, is that things get resolved quickly, but however long it lasts, we’ll support our members and the community.”
Scott Wilson
In Massena, N.Y., Scott Wilson, CEO of the $761-million SeaComm FCU, noted his organization’s markets border Canada.
“We have a significant federal workforce in Customs and Border Protection, along with other federal employers, such as the Federal Prison at Ray Brook, transportation and the U.S. Army stationed at Fort Drum in Watertown, N.Y.,” he explained. “Therefore, a majority of those affected would fall under essential service.”
CUs Providing Options
But Wilson told CUToday.info his organization is ready to assist any members impacted by the shutdown of RIF.
“If any of our members are affected and don’t receive a paycheck, we absolutely understand that one may have difficulty making an auto payment, credit card or mortgage payment, or just need some additional credit to get through until the U.S. Government is fully funded and paychecks resume,” Wilson said. “ We will be willing to assist them with a number of options, including, but not limited to, offering lines of credit, extensions or skip payments, bridge loans or even waiving a penalty for early withdrawal on a certificate of deposit…If this were to go on at any length of time, it would certainly have an adverse effect on the economy, and we would address it at that point in time.”
In Leavenworth, Kans., Mike Augustine, CEO of $208-million Frontier Community CU, told CUToday.info it’s “still early.”
“So, we haven’t had many requests for assistance yet, but I expect those will start coming as the week goes on,” said Augustine. “Some members may be waiting to see if this is short-term, but I’d encourage them not to wait until they’re too far behind, because that makes it harder for us to help.”
Augustine noted that a large portion of the credit union’s membership is active-duty military and federal civil service employees. To support them, Frontier is offering one-month extensions on existing loans, with the option for a second month if the shutdown drags on. The CU also has 1% APR emergency loans available for 60 days, with refinancing options if needed, as well as guaranteed pay advances for members with direct deposit. Fee waivers and refunds are also being offered.
“The threat of permanent layoffs is absolutely concerning,” Augustine added. “We’re watching closely to see if that actually happens, but for now, our focus is on making sure members know we’re here to help.”
In Omaha, Neb., the $1.3-billion Cobalt Credit Union has rolled out a Furlough Relief Loan and Loan Assistance Program to support members affected by the federal government shutdown. Available immediately, the relief loan offers up to $5,000 at 0% APR for 90 days, with no fees and no payments for the first 60 days.
For existing borrowers, Cobalt is also offering 30- or 60-day payment extensions on qualifying loans—including auto, RV, boat, motorcycle, and personal loans—at no cost.
CEO Robin Larsen said the programs reflect the CU’s commitment to helping members through uncertain times.
“At Cobalt, our members are our top priority,” said Larsen. “We understand the strain that furloughed employees are facing. Our mission has always been to stand with our members in times of uncertainty, and this program reflects our ongoing commitment to providing both compassion and practical solutions.”
In Charleston, W.Va., the $79-million Element FCU does not expect many members to be out of work from the shutdown.
Jim Nussle
“This will be a minimal impact for us and our members,” said CEO Linda Bodie. “We are ready to help our members who are affected. We have helped our members through hardships—government shutdowns and natural disasters over the years.”
CU Trades Respond
America’s Credit Unions President and CEO Jim Nussle acknowledged credit unions’ support role could be bigger during this shutdown.
“This year's government shutdown will be much more consequential, as some government employees could lose their jobs,” Nussle said. “For credit unions, this means they may have more members facing financial hardships and extended financial uncertainty. America's Credit Unions is actively monitoring funding discussions and will analyze the impact of the RIFs when more details are released. We will continue to provide insights and resources to credit unions to help them effectively support their members."
Jason Stverak
Jason Stverak, chief advocacy officer for the Defense Credit Union Council agreed that this year’s shutdown could have a bigger impact than those in the past.
“As some federal employees may face the prospect of losing their jobs—not just delayed paychecks,” Stverak said. “Through it all, credit unions continue to stand ready to serve. We’ve already seen extraordinary efforts from defense credit unions nationwide as they provide relief, flexibility, and financial counseling to members navigating this uncertainty.
“I want to thank our credit unions for their dedication and resilience,” continued Stverak. “Even in the face of prolonged financial uncertainty and the specter of federal reductions-in-force, they remain committed to their mission of protecting their members’ financial well-being. DCUC is proud to represent institutions that consistently put people over profits, ensuring military families, veterans, and government employees have a safe harbor in turbulent times.”