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Banking industry

Banks Offer Relief to Furloughed Federal Employees

Strategic Insights

— 1 min read

Federal employees facing financial hardship due to the current budget impasse are receiving assistance from several Memphis-based banks. NationsBank, Union Planters Bank, and First Tennessee Bank have announced policies to help furloughed employees by temporarily waiving or deferring loan payments, while Leader Federal Mortgage is working on a case-by-case basis with affected customers. The banks' efforts aim to alleviate the financial burden on federal employees and maintain the morale of those affected by the budget standoff.

Key Takeaways:

  • NationsBank will waive consumer and mortgage loan payments for 30 to 60 days for federal employees who request help, and will not report past due loans to credit bureaus.
  • Union Planters Bank will offer similar treatment to federal employees who are their customers, assuming their mortgage loans are in good standing.
  • First Tennessee Bank will work on a case-by-case basis with furloughed employees who request additional time to make payments, and will not charge fees for late payments.
  • Leader Federal Mortgage will work with customers on a case-by-case basis to provide relief, but has not yet received any requests to extend payments.
  • The banks' policies are in place to help furloughed employees and maintain the morale of affected workers during the budget impasse.
  • Most banks and mortgage bankers sell loans they originate and cannot control repayment terms of the contract, therefore normal policies apply to late payments, said L. Patrick Sandlin, president and chief executive officer of Community Mortgage Corp.

Statistics:

  • 30-60 days: the duration for which NationsBank will waive consumer and mortgage loan payments for federal employees who request help.
  • 90 days: the typical timeframe before foreclosures take place on a loan that is in arrears, according to L. Patrick Sandlin of Community Mortgage Corp.
  • 383-6705: the phone number that federal employees in Memphis can call to ask for an extension on Union Planters' payment deadline.

Sources:

  • Mary Waller, spokesman for NationsBank
  • Luke Yancy, executive vice president of Union Planters Bank
  • Linda Schoonover, vice president at First Tennessee Mortgage Co. Inc.
  • Kirk Bailey, executive vice president, chief operating officer, and chief lending officer of Leader Federal
  • L. Patrick Sandlin, president and chief executive officer of Community Mortgage Corp.

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