Banks, credit unions respond to longest government shutdown

Banks and credit unions across Iowa are responding to the government shutdown in hopes to alleviate stress from federal workers.

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Banks, credit unions respond to longest government shutdown

Calvin Hall is seen on Wednesday, January 23, 2019.

Calvin Hall is seen on Wednesday, January 23, 2019.

Wyatt Dlouhy

Calvin Hall is seen on Wednesday, January 23, 2019.

Wyatt Dlouhy

Wyatt Dlouhy

Calvin Hall is seen on Wednesday, January 23, 2019.

Alexandra Skores, News Reporter

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With the longest government shutdown in U.S. history continuing into its 34th day, some Iowa banks and credit unions are offering a special loan program to federal employees facing a dearth of paychecks.

Some banks and credit unions have developed individual programs to help assist the federal workers.

One such bank is the University of Iowa Community Credit Union, which has responded to assisting federal employees with its own program, said Rebecca Neades, the vice president of community development and governmental affairs for the credit union. 

RELATED: Partial U.S. government shutdown impacts Iowa agriculture

The Credit Union will offer a special loan program for federal employees with a 4 percent interest rate and no payments for 90 days, Neades said. She also encouraged current members to stop by a branch and discuss loan deferments for members.

“A 2018 federal study shows that 40 percent of adults don’t have enough savings for a federal emergency,” Neades said. “[The Credit Union] knows that there are many federal workers not receiving a paycheck. We understand that it is a stressful time for employees.”

Neades said that the Credit Union is quite interested in supporting students and will be open to talking through options for students who are in need of guidance during this time.

A Cedar Rapids and Marion credit union, First Federal Credit Union, also offers a program for federal employees not receiving paychecks.

“We have implemented our own program at [First Federal[],” CEO Tom Chalstrom said. “It includes a loan with no interest, and interest will not be charged until the member receives a paycheck. This allows the member the opportunity to get things back to normal.”

Chalstrom said he encourages federal workers to reach out to their financial institutions to get help during this time.

RELATED: Government shutdown hurts UI researchers in funding, resources

BankIowa President and CEO Alison Urbina said BankIowa, which serves several locations in eastern Iowa, has also decided to respond to the shutdown’s effect on its members. 

“BankIowa has reached out via social media to let people who are affected by the shutdown know that we are here for them and will work together to develop a personalized solution to assist them,” Urbina said.

Kathy Bialk, the director of the University of Iowa Office of Student Financial Aid, said just last week it received more information from the U.S. Department of Education to help guide students filling out FAFSA documentation.  

Bialk said there were a few UI students who had difficulties in obtaining documentation from the IRS, but they now have a reasonable alternative and can receive their federal financial aid without delay.

“In lieu of obtaining IRS tax-return transcripts and verification of nonfiling forms from the IRS, copies of signed Federal Income Tax Returns, and written statements of nonfiling can be submitted by students as acceptable documentation to verify the data on the Free Application for Federal Student Aid,” Bialk said.

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