The largest US credit union, which serves the military, is preparing for a possible US government budget crisis by offering to advance pay for members with direct deposit accounts, in the event that federal funds are cut off.
The move comes as US lawmakers on Saturday engaged in a frantic effort to raise the US government debt ceiling and avert a debt default that could plunge the world economy back into recession before an August 2 deadline.
The Navy Federal Credit Union, which serves the US armed forces and also civilians linked to the military, has some $44 billion in assets and 3.7 million members.
“As a part of our debt ceiling contingency plan, we will advance pay to cover DoD [Department of Defense] civilian direct deposits scheduled for 5 August and active duty direct deposits (Army, Marine Corps, Navy, Air Force, and Coast Guard) scheduled for 12 August,” Navy Federal said in a statement posted on Twitter.
“As a credit union serving all branches of the military, we want to do our part in easing some of the uncertainty for our military families during this potentially challenging time,” Navy Federal President and CEO Cutler Dawson in a separate statement.
“Navy Federal?s strong financial position allows us to ensure, to the extent possible, that our military families do not suffer financially in the wake of a political impasse,” Dawson said.
The US economy hit its $14.3 trillion debt ceiling on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally — but can only do so through Tuesday.
If the debt ceiling is not raised the US government will have to cut its budget somewhere — stop paying the military, retirement health benefits, social security, and/or its debts. Some estimates say it will have to cut spending by up to 40 percent over the first few months.