Brandon Lee
During a government shutdown, federal workers deemed non-essential are placed on furlough, meaning they do not work and do not get paid until the shutdown ends. While they are guaranteed back pay, this does not help them pay their bills in the meantime. Some banks and credit unions have stepped in to offer assistance to federal workers during government shutdowns, including low- or no-interest payroll advances and loans. However, this assistance is typically discretionary and offered on a case-by-case basis.
| Characteristics | Values |
|---|---|
| Number of federal employees affected by the shutdown | 800,000 |
| Banks offering interest-free loans | Democracy Federal Credit Union, First Command Financial Services, PNC Bank, FirstLight Credit Union, United Federal Credit Union, Transportation Federal Credit Union, Ally Financial, Bank of America |
| Other banks offering assistance | USAA Bank, Citi, American Express, Discover, BofA, Verizon |
| Types of assistance offered | Waived fees, extended payment dates, low-interest loans, waived interest charges, loan modification, repayment plans, penalty-free early withdrawal, waived cash advance fees |
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What You'll Learn
Banks are offering interest-free loans and waived fees
During the government shutdown, banks, credit unions, and lenders are offering financial support to federal workers in the form of interest-free loans and waived fees. This support is especially crucial as hundreds of thousands of federal employees missed their first paycheck on January 11, with bills continuing to accumulate.
First Command Financial Services, which caters to military members, is issuing zero-interest payroll advances, offering loan assistance, penalty-free early withdrawals, and waiving cash advance fees for Coast Guard and federal employee clients. Similarly, Democracy Federal Credit Union is providing short-term emergency loans with 0% interest to federal employees, while USAA Bank and Transportation Federal Credit Union are offering low-interest loans.
Ally Financial and American Express are also assisting impacted customers by waiving various fees and encouraging them to contact the bank directly to discuss their options. Bank of America is helping on a case-by-case basis with fee refunds and waivers, repayment plans, and loan modifications. PNC Bank is waiving monthly service fees and late fees for federal employees experiencing financial difficulties due to the shutdown.
Credit unions, being not-for-profit organizations, have also stepped up to support their members and attract new ones. For instance, United Federal Credit Union has put together assistance packages for federal workers who are members and those who aren't. FirstLight Credit Union has extended similar offers, including no-interest loans and fee waivers for early withdrawals from CDs.
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Credit unions are providing low-interest loans
During a government shutdown, credit unions are offering low-interest or interest-free loans to federal workers who are facing financial hardship. These loans can help federal workers meet their mortgage, student loan, credit card, and other payments. While some credit unions are offering unsecured loans with low-interest rates, others are providing interest-free loans to impacted members for a fixed duration.
For instance, Launch Federal Credit Union and Navy Federal Credit Union are offering zero-percent interest loans to federal government employees, with limits of $3,000 and $6,000, respectively. Similarly, the U.S. Employees Credit Union is providing interest-free loans to affected members for 60 days, regardless of their credit score. Justice Federal Credit Union is also offering unsecured loans with low interest rates to impacted workers at the Department of Justice or Department of Homeland Security.
Credit union FedChoice is offering short-term loans with interest rates as low as 2.50 percent and is also waiving early withdrawal fees on some certificates of deposit. Other credit unions, like Veridian Credit Union and Space Coast Credit Union, are offering no-interest loans to members facing financial difficulties due to the government shutdown.
In addition to credit unions, some banks are also stepping up to help federal workers. For example, Provident Bank in New Jersey is waiving late fees on mortgages and credit cards and allowing early withdrawal from certificates of deposit without penalties. Huntington, a bank based in Columbus, Ohio, is offering a "low rate, quick loan program" for federal employees.
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Cellphone companies are waiving late fees
During the government shutdown, 800,000 federal employees were furloughed or working without pay. As workers protested the shutdown, several banks, credit unions, and lenders stepped up to offer financial support in the form of interest-free loans, extended payment dates, and waived fees.
Cellphone companies are also doing their part to help federal workers during the shutdown. Verizon, for example, has announced that it will waive late fees and agent assistance fees for federal government employees directly impacted for the duration of the shutdown. The company's “Promise to Pay" program allows federal employees to set a future date to pay their wireless or cellphone bill. Similarly, AT&T is waiving late fees and suspending service termination for customers financially impacted by the COVID-19 crisis.
Other cellphone companies are also providing support during the pandemic by offering free services, unlimited data, and suspending shutoffs. Comcast, for instance, is offering free access to its Xfinity WiFi hotspots for everyone, including non-subscribers, for 60 days. T-Mobile is providing unlimited data to all current customers with data plans for the next 60 days, and Hyundai is reviving its Hyundai Assurance Job Loss Protection Program.
While these offers from cellphone companies are a great help to those impacted by the government shutdown or the COVID-19 pandemic, it's important to remember that most of these offers are made on a case-by-case basis. Customers are encouraged to contact their service providers directly to discuss their options and ensure they get everything in writing to avoid unexpected bills or damage to their credit score later on.
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Nonprofits are offering assistance
During the government shutdown, nonprofits are offering assistance to federal workers. United Way Worldwide has launched the United for U.S. Fund, which will distribute donations to local United Ways that serve communities with a high number of federal workers, contractors, and others impacted by the shutdown. Local United Ways, such as the United Way of the National Capital Area in Washington D.C., have also established emergency assistance funds. The Greater Washington Community Foundation's Resilience Fund provides emergency cash and food relief for local workers, contractors, and small business owners affected by the shutdown.
In Houston, federal workers without pay during the shutdown can seek financial assistance through the Houston Relief Hub, a city partnership with local nonprofits. The nonprofit is offering $100 vouchers to furloughed workers. Food banks across Houston, such as the Houston Food Bank, are also receiving calls from furloughed workers and directing them to their neighborhood pantries.
Other nonprofits offering assistance include the Federal Employee Education & Assistance Fund, which is providing loans to furloughed employees, and the Coast Guard Foundation, which is accepting donations to support Coast Guard members during the shutdown. Feeding America is also accepting donations to provide meals to families impacted by the shutdown through a network of food banks. World Central Kitchen is providing free meals to federal workers.
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Some companies are offering payment extensions
During a government shutdown, many federal workers are left without pay. As a result, some companies are offering payment extensions to help those impacted. For instance, Wells Fargo has allowed customers to skip their mortgage payments and tack it onto the end of their mortgage without charging late fees. Similarly, Bank of America and U.S. Bank are advising federal workers to inquire about their client assistance programs that may waive late fees or provide loan modifications.
Some telecom companies are also offering support. Verizon implemented its "Promise to Pay" program, which allows federal employees and other affected workers to set a future date to pay their wireless or cellphone bill without late fees.
Many credit unions are also offering assistance. Democracy Federal Credit Union is offering a short-term emergency loan with 0% interest, while USAA Bank is providing low-interest loans. United Federal Credit Union has also put together packages for federal workers who are already members and those who aren't.
Other companies are helping in different ways. Compass Self Storage is offering to postpone rent due until the shutdown ends without charging late fees. Toyota is offering extensions on car loans and leases of up to two months for federal workers. Airbnb has a program that offers federal executive branch employees an extra paid night if they share their homes for three nights.
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Frequently asked questions
Yes, banks and credit unions are offering financial help to federal workers during the shutdown. This includes low- or no-interest payroll advances and loans.
First Command Financial Services and Democracy Federal Credit Union are offering interest-free payroll advances to their members who are federal employees.
Democracy Federal Credit Union is offering short-term emergency loans with 0% interest. USAA Bank and Transportation Federal Credit Union are providing low-interest loans.
Credit unions like United Federal Credit Union and FirstLight Credit Union are offering no-interest loans to federal workers. Banks like American Express, Discover, and Citi are offering to waive late fees, return check fees, and interest charges.
Yes, federal workers can file for unemployment compensation benefits online at www.dcnetworks.org or by calling (202) 724-7000. However, they will be required to pay back unemployment benefits if they receive retroactive pay from their employer.
