The Japan Times - US federal workers apply for loans as shutdown hits military morale

Hundreds of thousands of federal employees have been furloughed since the shutdown began on October 1, while others deemed essential -- including some military personnel -- have been required to turn up to work without receiving a paycheck.

"We kind of feel like we're like a bargaining chip to an extent," a long-serving US Air Force employee told AFP. "We're not getting paid because people in D.C. who are getting paid can't get on the same page."

"Not only are we working without pay, we're actually doing more without pay, because our civilian teammates have all gone home on furlough," added the man, who was not authorized to speak publicly. "That's not good for troop morale."

The first test will come next week, when federal workers will start seeing their paychecks affected.

But if no deal is reached by the end of this month, federal workers will receive nothing in the following paycheck.

"It's very stressful," said Marilyn Richards, a 46-year-old Air Force and Navy veteran in Missouri, who has been furloughed -- forced to take leave -- from her job as an administrative support worker at a federal agency.

Richards, who is the main breadwinner at home, told AFP that she was concerned about how the shutdown could affect her finances.

"For most of us who live paycheck to paycheck, you're counting on your next paycheck to continue to keep the lights on," she told AFP. "And that's what I do."

- Bridging the gap -

The uncertainty unleashed by the shutdown is pushing some federal employees to make use of paycheck protection programs being rolled out by credit unions across the country.

The Navy Federal Credit Union -- which helped around 19,000 people with loans totaling more than $50 million during the last shutdown in 2018-2019 -- has already seen applications for its program this time around, according to a spokesperson.

These loans are designed to help federal workers get through a few weeks without pay and "bridge the gap" until the shutdown ends and they receive their back pay, Haleigh Laverty, a spokesperson for the Defense Credit Union Council, told AFP.

Many of their members are offering short-term, interest-free loans of a few thousand dollars for between 90 days and six months, helping to protect consumers -- and their credit scores -- during the shutdown.

Among them is the Cobalt Credit Union, which serves around 120,000 members with ties to Nebraska's Offutt Air Force Base, home to the headquarters of the US Strategic Command.

"We still have active duty and a lot of essential positions on the base that have to report due to missions all over the world," Cobalt Credit Union president and CEO Robin Larson told AFP.

The credit union helped thousands of its members get through the last shutdown, and has received several applications for new loans since October 1.

- Mortgage challenges? -

While federal workers are the most affected by the shutdown, many in the private sector could also soon feel its effects, according to mortgage brokers who spoke to AFP.

The biggest impact of the shutdown on the mortgage market is likely to be a slowing down of the lending process, said Alex St. Pierre, a Charleston, South Carolina-based broker.

Flood insurance -- which is vital in some coastal areas of the United States -- is also likely to be affected, as many state-run lenders are currently shuttered, potentially pushing borrowers to look at more expensive options in the private sector, he told AFP.

Government workers looking for a mortgage face additional pressures, including the very real threat of dismissal by the Trump administration, and delays to identity verification checks while their departments are closed, he said.

S.Yamada--JT