Herndon-based Northwest Federal Credit Union will provide no-interest loans up to $10,000 to credit union members who may be furloughed because of massive federal budgets cuts scheduled to take effect on Friday.
In addition to zero-percent loans, the credit union also will waive early withdrawal penalties on any certificate of deposit for members who need immediate access to their savings.
Automatic budget cuts totaling $85 billion this fiscal year are scheduled to begin March 1. The cuts, known as sequestration, are expected to result in furloughs beginning in the last week of April for 800,000 civilian employees of the Department of Defense, including 90,000 in Virginia. The employees would be forced to take one day of leave a week without pay for 22 weeks.
“We realize that the sequestration may create tough times for some our members and others in the community,” Chris McDonald, Northwest Federal’s president and CEO, said in a statement. “Our credit union has been serving this community for more than 65 years, and our commitment to help our members will continue through this challenging time.”
The zero-interest loans will be available for members who meet minimum qualifications for a period of up to 90 days after their furlough period ends.
“We’re here to offer some peace of mind to our members who may be worried about how government furloughs might affect their personal financial situations,” said Colleen Daly, senior vice president of lending at Northwest Federal.
Northwest Federal is the third-largest credit union in Virginia and one of the top 50 credit unions in the nation. Established in 1947, it serves more than 125,000 members and has assets of more than $2.5 billion.