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US banks boost aid to customers as federal shutdown drags on
[NEW YORK] Lenders across the US are bolstering assistance programs and evaluating how else to help their customers as the longest partial government shutdown in history threatens to extend through a second payday for furloughed federal workers.
Navy Federal Credit Union, a Vienna, Virginia-based lender with more 8.1 million members, is offering no-interest, no-fee loans up to US$6,000 for its 100,000 affected customers. So far, 16,000 customers have enrolled, and the lender extended advances to cover a second pay period.
"One can only imagine, as far as missing a paycheck, of course there's great concern and financial uncertainty," Tynika Wilson, senior vice president of debit card and fund services at Navy Federal, said Tuesday in an interview. "Our program is to bridge that gap during this time, to put members at ease."
About 800,000 federal employees aren't receiving paychecks amid the shutdown that began Dec 22 as President Donald Trump and lawmakers clash over funding for a border wall with Mexico. Workers have been promised back pay when the impasse ends. To tide them over, more than 100 banks have programs in place to help, according to the American Bankers Association.
Programs include fee waivers and low-cost loans. Some of the nation's biggest banks, including Bank of America Corp and Wells Fargo & Co, are offering assistance on a case-by-case basis. Wells Fargo spokeswoman Ann Wasik said the number of customers who have tapped the bank's assistance program has been low, but increasing as the shutdown continues.
US Bancorp, the country's fifth-largest bank by deposits, is offering loans up to US$6,000 at 0.01 per cent interest. Executives at the Minneapolis-based bank are "not expecting lots of volume, but want people to know if they have an emergency situation it's there," Chief Financial Officer Terry Dolan said Wednesday in an interview.
PayPal Holdings Inc said Friday that it would offer interest-free cash advances up to US$500 to federal workers through its credit cards. Huntington Bancshares Inc is automatically waiving overdraft fees for affected government employees, and has a low-rate loan program that began Jan 7 and will extend 30 days or until the shutdown ends, whichever is sooner.