After facing criticism for not offering no-interest loans to customers affected by the partial government shutdown, USAA is donating $15 million to a support organization that will begin offering the money Wednesday to Coast Guard members going without paychecks.
The San Antonio-based financial services giant is making the donation to Coast Guard Mutual Assistance (CGMA), which will offer interest-free loans of $1,000 to Coast Guard members with dependents and loans of $750 to those with no dependents, according to a joint press release from the organizations. The American Red Cross will help facilitate payments to Coast Guard personnel through its Hero Care Center electronic fund distribution process.
While the Coast Guard is considered part of the armed forces, it is overseen by the Department of Homeland Security (DHS) and not the Department of Defense, so Coast Guard personnel deemed essential have been working without pay.
“USAA’s mission is to be there for our members when they need us most,” USAA CEO Stuart Parker said. “This initiative, together with our efforts directly supporting members, will help thousands of Coast Guard families.”
In its fourth week, the shutdown is already the longest in history, with President Donald Trump and Congressional Democrats at odds over funding for a border wall and no resolution in sight.
USAA angered many of its Coast Guard customers earlier this month when it offered low-interest loans to members of the Coast Guard, National Oceanic and Atmospheric Administration (NOAA) Corps and Public Health Service Corps. In previous shutdowns, USAA had offered no-interest loans to affected customers. The low-interest loans, which are subject to credit approval, carry a 0.26 percent interest rate and can go as low as 0.01 percent with an automatic-payment plan.
Some banking customers took to social media and other platforms to express their disappointment with USAA over the company’s decision not to offer no-interest loans. Some were further angered when they applied for the low-interest loans and were not approved.
Coast Guard Admiral Karl Schultz told Coast Guard members Tuesday that they would not receive their scheduled paychecks but noted USAA’s donation to CGMA.
“To the best of my knowledge, this marks the first time in our Nation’s history that service members in a U.S. Armed Force have not been paid during a lapse in government appropriations,” he stated in a Facebook post. “… I recognize the anxiety and uncertainty this situation places on you and your family, and we are working closely with service organizations on your behalf.”
Matt Hartwig, a USAA spokesman, said the company is trying to do what it can for its members affected by the shutdown.
“As the shutdown continues, we are offering more ways to help our members affected by a disruption in pay,” Hartwig said in an email. “We have also sought ways to help the broader military community affected by the shutdown.
“We have several options available to members affected by the shutdown that may help them. We encourage members to contact us to discuss their needs.”
In addition to the donation to Coast Guard Mutual Assistance, USAA also announced it is making special offers available to eligible members. Those offers include:
- 60-day payment deferral on consumer loans such as auto and personal loans
- 90-day deferral on credit card payments, though interest will continue to accrue
- special payment arrangements on auto and home insurance payments
Amber Plummer of Seattle said she and her husband, a DHS employee on furlough, have been USAA customers for nearly 15 years and have insurance and loans through the company.
“Usually what [USAA does] is they’re able to make up the income and then once you get back pay, you pay it back,” Plummer said. “So that’s more of what I expected. Not any free handout or anything, but definitely didn’t expect to be left with being told, ‘Well, you don’t work for Coast Guard. So you don’t qualify for any help right now.’”
She said she has friends affected by the shutdown who are Navy Federal Credit Union members and have taken advantage of NFCU’s no-interest loan, which has a maximum loan amount of $6,000, according to the organization’s website.
Plummer said she is disappointed in USAA for not offering no-interest loans during this shutdown.
“Any time we’ve had an issue like a car accident or anything, they’ve always been human first before they get into the questions of what happened,” Plummer said. “We had all of our belongings stolen at one point and the very first question was, ‘Are you OK?’ That’s what I like about them is they always seemed focused on the person and the family. Until now.”