How Credit Unions Can Help Members Cope with Sequestration

From loan assistance, penalty-free early withdrawal and special low interest rates to hotlines, education campaigns and emergency loans products and forgiveness offers, credit unions are stepping up to provide members with relief. 

Navy Federal Credit Union Receptionist Welcoming Member“Our goal is to serve our members, whatever the situation,” said one president of a federal credit union. Many of the nation’s leading credit unions embarked on creative initiatives to lessen the burden of sequestration. The Navy Federal Credit Union, for example, offers loan assistance, penalty-free early withdrawal, and special low rates for over drafting a line of credit. These endeavors, and more, are just a few of the ways credit unions are dealing with the effects of sequestration.

Many credit union members face uncertainty in their jobs—possible furlough and even unemployment. So we’ve highlighted here a few details about the ways that credit unions are helping members survive today and prepare for their financial futures.

Sequestration hotlines

Navy Federal, like many other credit unions across the country, set up a 24/7 sequestration hotline with live telephone support to give members advice on how to cope with sequestration. Member service reps on the hotline talk to members with ideas on how to set a budget and cut expenses, make adjustments in their means of transportation, reach out proactively to creditors and involve the whole family in goal-setting. They also talk with members about options for assistance with loan payment problems, available emergency loans, penalty-free early withdrawal on certificates of deposit, and a three-percent APR checking overdraft line of credit.

By calling CommonWealth One’s sequestration hotline, members can access Debt In Focus, a free online debt analysis application that will assess their financial situation and create a monthly budget.

Education and awareness campaigns

Belvoir Federal Credit Union in Woodbridge, Virginia, offered free seminars with titles including “Taking Charge in Tough Times” and “It’s a Matter of Life and Debit.” The credit union also provides members with personal financial coaching.

Wright-Patt Credit Union in Dayton, Ohio, worked with the Dayton Development Coalition and Montgomery County’s Workforce Development Division and U.S. Air Force officials to develop assistance programs to members dealing with defense cuts. Programs included a community resource fair at a local university and an information fair on Wright-Patterson Air Force Base.

Emergency loans, special forgiveness offers, penalty-free withdrawals during furloughs and unemployment

Government Employees Furloughed or Unemployed Due to SequestrationFor furloughed employees, Pentagon Federal Credit Union in Alexandria, Virginia, is allowing members to skip a payment on any loan except a real estate loan, offering debt consolidation loans, offering furlough loans equal to a month’s pay on a term of up to 12 months at 7.99-percent APR, and a one-month due date bump each month for the duration of the furlough.

At HanscomFCU on Hanscom Air Force Base in Massachusetts, members can apply for an emergency LifeLine loan equal to a month’s net pay up to $5,000 at zero-percent APR for 30 days. What’s more, the loan is connected with the member’s checking account, covering debit card purchases, ATM withdrawals and checks.

North Island Credit Union in San Diego offers similar help with loan payments and penalty-free early CD withdrawals. Navy Federal is waiving early withdrawal penalties on early CD withdrawals. And two credit unions, Keys FCU in Key West, Florida, and SACFCU in Bellevue, Nebraska, are offering penalty-free withdrawal on share certificates, skip-payment options and sequester loans. Keys FCU members can borrow as much as $5,000 at one-percent annual percentage yield over 36 months, and SACFCU members can take advantage of emergency short-term loans and loan modifications plus financial counseling.

At San Diego Medical FCU, qualified members can take out a loan of up to $2,500 during sequestration with no origination fees, zero-percent APR through September 30, 2013, and a 24-month repayment term at six-percent APR starting October 1, 2013.

Credit card deals

Finally, an increasing number of credit unions are offering credit limit increases and promotional rates on credit cards for sequestration relief. For example, America’s Credit Union in Lewis-McChord, Washington is expediting approvals on credit limit increases, offering a promotional 1.3-percent APR through February 28, 2014, along with a balance transfer rate of 6.9-percent APR for the life of the transferred balance and no balance transfer fees.

If your credit union serves members affected by sequestration, helping them effectively get through it requires adequate training and coaching for your member service reps. At Robert C. Davis and Associates, as a sales effectiveness consultancy with specialized credit union expertise, we can use our exclusive Quality Conversation approach to make sure your member services reps are prepared to ask the right questions, build rapport with members seeking help and provide a solution that will meet the members’ needs and deliver the world-class service they’ve come to expect—and will appreciate all the more during a difficult time.

Contact us for a free consultation at 678-548-1775 or email RCDA president Bob Davis direct at bob@robertcdavis.net. For more information, visit www.robertcdavis.net.