Governor Kaine Notes Success of the Virginia State Loan Program
Press Release
Governor Kaine Notes Success of the Virginia State Loan Program
- In just one month, more than 1,300 loans have been funded for more than $600,000 -
Governor Timothy M. Kaine today noted the extraordinary success Virginia State Employee Loan Program, a unique partnership to help meet the short term loan needs of state employees. In just one month, the pilot program has issued loans to 1,310 state employees for a total value of $641,657.
"I believe the early success of this pilot program clearly demonstrates that there is a need for these types of loans. More importantly, it allows state employees the opportunity to receive small loans without having to go to predatory lenders," Governor Kaine said. "The success of this program demonstrates that other large employers can implement similar initiatives as a service to their own employees."
The program, a partnership between the Commonwealth of Virginia Campaign (CVC) and Virginia Credit Union (VACU), offers small loans of $100 to $500 to state employees facing financial difficulties.
Participants in the State Employee Loan Program must be a non-probationary state employee and a member in good standing with the VACU. To qualify for a loan, participants must successfully complete an online financial fitness course followed by a 10-question financial literacy exam.
The loans carry an APR of 24.99 percent and are payable over six months with no prepayment penalty. Loans are repaid through direct debit from the employee's VACU checking or savings accounts, in up to 12 semi-monthly payments. Employees can have only one loan at a time and may apply for a maximum of two loans annually. There is no credit check for loans and the loans are not reported to credit agencies.
The Virginia Credit Union provides the funds for the loans, with no state tax dollars involved. Loans are backed by the Virginia State Employee Assistance Fund (VSEAF), a 501(c)3 charity administered by the CVC team within the Department of Human Resource Management. Both CVC and VSEAF programs are run by state employees for state employees
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