In a response to the ongoing government shutdown, Illinois State Treasurer Michael Frerichs has taken steps to cushion the financial blow for federal workers who've been left unpaid. Frerichs announced a $50 million loan program that will offer zero-interest and low-interest loans through participating banks and credit unions. As reported by the State of Illinois official news release, the program is backed by the Illinois treasurer's office with the intent to assist an estimated 153,000 federal employees residing in Illinois, though it's unclear exactly how many are going without paychecks since the shutdown began on Oct. 1.
"It is truly disheartening that a D.C. dispute over the right to affordable health care has reached a point where the federal government has locked out some workers and forced others to continue working without pay," Frerichs said in the statement. The program, accessible through various financial institutions, aims to provide relief so workers can "feed their families, pay their mortgage, and stay current with electric and water bills.” One participating lender is Great Lakes Credit Union, with 20 branches across Chicagoland and Danville.
Great Lakes Credit Union, lauding the initiative, has expressed its support. "We are excited that Treasurer Frerichs created this opportunity," said Patrick Basler, Chief Experience Officer at GLCU, according to the news release. "Helping those in need is at the heart of our Banking for a Greater Good mission. We welcome the opportunity to provide financial solutions for federal employees during this challenging time."
The mechanics of the loan program lay bare a straightforward system: the Illinois Treasurer deposits funds with financial institutions at 0.01 percent, on the condition that they loan out the money to federal workers at a zero percent interest rate. Other rates are also possible, depending on the financial institution's policies. "Using federal employees and their families as political leverage is just plain wrong," Frerichs said, emphasizing the need to acknowledge the role of federal workers as public servants and to protect them from becoming collateral damage in political disputes.
Financial institutions that wish to join the Federal Workers Emergency Loan Program should become an approved depository and can reach out to the Treasurer's Office at [email protected]. This program is likened to other linked-deposit initiatives offered by the Treasurer's Office, which has historically provided support to farmers, small businesses, and individuals by offering below-market rates in service of fostering job growth and community strength.
About the participating financial institution, Great Lakes Credit Union was founded in 1938 as a not-for-profit, member-owned financial cooperative handling more than $1.4 billion in assets. The credit union, insured by the NCUA and sporting a community development credit union designation, serves over 100,000 members and offers a suite of financial solutions to facilitate members' financial autonomy. Meanwhile, the Treasurer's Office manages around $60 billion, channeling investments towards education, retirement, and more efficient local government bill processing, ultimately delivering savings to taxpayers.
