Federal workers receive nearly $1 million in emergency loans through state, community bank programs

BISMARCK, N.D. (North Dakota Monitor) — Furloughed federal workers received nearly $1 million in emergency relief loans for missed paychecks from North Dakota banks since the start of the federal government shutdown.

The Furloughed Federal Employee Relief Program, administered by the Bank of North Dakota, along with other loan programs from community banks were established earlier this month to help federal workers affected by the shutdown meet their financial obligations.

Don Morgan, president of the Bank of North Dakota, said the bank has received 77 applications for the state’s loan program as of Oct. 27, totaling about $480,000, with many of the requests centered around the Air Force bases at Minot and Grand Forks, as well as Cass and Morton counties.

“We’re actually glad it’s starting out a little bit slower,” Morgan said in an interview. “It’s allowing us to work some of the kinks out of the first of its kind program.”

Morgan said the bank was anticipating between 500 to 1,000 furloughed North Dakota federal workers would take advantage of the program. The Industrial Commission estimates there are about 9,200 federal workers in North Dakota, including members of the military.

“I think it’s just too early to tell with so many unknowns,” he said. “I think the longer the federal shutdown goes on, I think the demand kind of builds.”

One looming question on the program, Morgan said, is a push by congressional leaders to pay military members and essential workers currently working without pay during the shutdown.

Sen. Ron Johnson, R-Wis., introduced the Shutdown Fairness Act that would pay military members, essential federal employees and contractors that support those exempted federal workers during the shutdown. The bill failed 54-45 on the Senate floor on Thursday.

“We think that could be affecting it and really affect it moving forward,” Morgan said.

He said another factor for the program are other banks, such as Gate City Bank and USAA, providing their own programs for furloughed federal workers.

Kim Settel, chief retail banking officer for Gate City Bank in Fargo, said her bank’s furloughed federal worker loan program offers six-month, 0% interest loans for up to $5,000 per furloughed employee. The program has accepted 121 applications, totaling about $500,000, as of Tuesday.

“I think people thought this would get resolved sooner rather than later,” Settel said. “We are here to help and we want to be a partner for these community members throughout this, when they need it.”

She added furloughed federal workers don’t need to be customers of Gate City Bank to participate in their six-month loan program, but they do need to live within their lending areas across 45 locations in North Dakota and Minnesota.

Gate City Bank is also participating in the state’s Furloughed Federal Employee Relief Program, but applicants cannot use both relief programs, Settel said.

“This is a great illustration of why a community bank is so wonderful because you have some place to go in the event of a crisis,” she said.

Morgan said any furloughed federal worker or military member living in North Dakota qualifies for the 2% interest loan program and should reach out to their local bank or credit union to start the application process. He added workers that use a bank outside of North Dakota would need to open an account with a local, North Dakota bank for the funds to be deposited.

North Dakota Monitor reporter Michael Achterling can be reached at machterling@northdakotamonitor.com.