DETROIT – The emails have come in from federal workers who say they’re stretching what’s left of their savings accounts and making cuts to their budgets where they can.
But something they’re worried about? Missing payments and harming their credit scores.
One local bank that focuses on Detroit is focused on creating some breathing room for those who are struggling.
One Detroit Credit Union’s president and CEO, Hank Hubbard, says: “We feel like it’s important. We’re all about people.” He says: “We are a community financial institution. We’re focused on people that live and work in and around Detroit. Things that happen here are what make us change our plans.”
How is One Detroit helping people affected by the shutdown?
For people who have loans with the bank, they will extend the loans' payments so you don’t have to worry about them this month. They’ll just tack them on the back end.
One Detroit also created a program for those who don’t have a loan with the bank. It’s a small and secured loan of about $2,000. There are no payment requirements for two months, with the hope of giving workers breathing room during the shutdown.
For information on this, head to their website. At the top is a green banner that directs federal workers to their resources -- or click here. You can also just walk into a One Detroit Credit Union and ask for help.
One Detroit Credit Union branches:
- Main office: 630 Howard St., Detroit, MI 48226
- East-side branch: 14740 Mack Ave., Detroit, MI 48215
- Highland Park branch: 15123 Woodward Ave., Highland Park, MI 48203
In discussing credit reports and the stress that comes with missing a payment, we sat down with a financial expert.
Noel Villajuan is the director of private client services at Sequoia Financial Group in Troy.
Villajuan said the biggest and best thing you can do about your credit score is to be proactive.
In this situation, call your creditor and let them know what’s going on. They may or may not be able to help out.
If they can’t? Noel said to be persistent, but if that doesn’t work, ask them to at least put a note in your report.
“Can we at least make some kind of record that I’ve had a conversation with you and I’ve advised you about my situation that’s out of my control?” Villajuan said.
That way, if your credit score does go down, that marker will tell different entities that might be the reason.
Villajuan also says not to focus too hard on your credit score. It’s a valuable asset, but since it’s not set in stone, it can go down and go back up at any time. “Your credit score is not a direct measurement of who you are.”
Lastly, he says budgeting is really important at this time or at any time where funds are low. Start lining up your priorities of what needs to be paid right away and areas that can be cut down.
Other credit unions working with federal workers
Many Michigan consumers working directly and indirectly for the federal government have been financially affected by the recent shutdownand are unsure of when their paychecks will resume.
At least 25 Michigan credit unions have reported to the Michigan Credit Union League that they are offering assistance, whether it’s formal relief programs or a case-by-case basis, to members and nonmembers alike who are at a financial disadvantage due to the government shutdown.
“As not-for-profit cooperatives, credit unions serve their members and communities through good times and bad and especially when a crisis hits,” said MCUL President and CEO Dave Adams. “Michigan’s credit unions are joining with many nationally to step up for their members affected by this unfortunate government shutdown.”
The following is a list of the products and services many Michigan credit unions are offering their communities:
- Interest-only payments on existing loans
- No-interest loans (often for up to 12 months)
- Payment delays, such as no-cost “skip a pay” on loans
- Waived-penalty certificate of deposit access
- Fee waivers on checking account overdraft fees
- Budgeting assistance
- Referrals to community assistance programs
“Several members have expressed how important our programs are to keep food on the table as they start missing paychecks, even though many of them continue to work,” said People Driven Credit Union Vice President of Marketing Dave Sullivan, speaking to the immediate response they heard upon announcing their assistance offerings.
Some credit unions, such as HarborLight Credit Union and Forest Area Federal Credit Union, didn’t implement formal products but made it a priority to aid all federal employees in need, making sure their members know there is help available wherever necessary.
Others, like Awakon Federal Credit Union and Calcite Credit Union, are supplementing their financial assistance programs with a fundraiser called Dressdown for the Shutdown, wherein staff donate $5 to dress casually, and additional donations are accepted from community members.
“Even though we are in a rural area, we do have members that work for the United States Department of Agriculture or the United States Coast Guard that have inquired about this option to help them through this difficult time,” said Safe Harbor Credit Union President and CEO Adam P. Johnson. “So, it’s obviously not just affecting the large cities. This government shutdown is affecting people all over the country, which is why we felt we needed to step up and offer something to our members.”
Here is a list of credit unions who have announced assistance offerings:
- American 1 Credit Union
- Awakon Federal Credit Union
- Calcite Credit Union
- Community Choice Credit Union
- Community Financial Credit Union
- CP Federal Credit Union
- ELGA Credit Union
- Filer Credit Union
- First United Credit Union
- Forest Area Federal Credit Union
- Frankenmuth Credit Union
- FreeStar Financial Credit Union
- HarborLight Credit Union
- Honor Credit Union
- Isabella Community Credit Union
- LAFCU
- My Personal Credit Union
- Northland Area Federal Credit Union
- Public Service Credit Union
- Safe Harbor Credit Union
- Shore to Shore Community Financial Credit Union
- Soo Co-Op Credit Union
- TBA Credit Union