Essential and nonessential federal workers are now able to receive no-interest, state-backed loans during the ongoing federal government shutdown after Gov. Ned Lamont signed bipartisan emergency legislation Tuesday.
The law sets up a partnership between the state and local banks and credit unions to guarantees federal workers in Connecticut, some of whom are still required to work while not receiving a paycheck and are otherwise ineligible to apply for unemployment assistance, will be able to receive financial assistance during the shutdown. Because the loans will be backed by the state, legislation was needed to approve the partnership.
The legislation permits federal workers who live in the state to receive loans from banks and credit unions that amount to one month’s net pay, capped at $5,000. In the event that the shutdown continues for an extended period of time, participating banks and the state will work with impacted employees to provide additional funds.
To date, a growing number of the state’s financial institutions have contacted the Lamont administration indicating their intention to provide the loans, including Webster Bank and People’s United Bank.
The legislation was approved Tuesday afternoon by both chambers of the General Assembly, and was immediately transmitted it to the governor for his signature. The legislation becomes the first bill signed into law by Lamont, who was sworn into office on Jan. 9.
“This unique and innovative partnership will help federal workers access the funding necessary to pay their bills and put food on the table during the shutdown,” Lamont said in a statement. “Its quick, bipartisan approval by the General Assembly is an example of what we can accomplish when we partner with the private sector and come together as leaders, rather than Democrats or Republicans.
Federal employees who are interested applying for a loan under the partnership should contact the bank or credit union of which they are a member to determine whether it is participating. If it is not, loans may be available through a bank or credit union other than that employees’ usual financial institution.