A South Bend-based bank with a big retail presence in Porter County plans to extend loans to federal employees who have been furloughed and businesses that are not getting paid during the government shutdown.
1st Source Bank will offer notes to clients who are not getting their federal paychecks because they are in non-essential job categories. The bank also will lend money to businesses whose federal contracts are in limbo, or who are not getting paid for work that is already done or still in progress.
The bank hopes to help customers who face potential hardship because of ties to the federal government, said Jim Seitz, president of 1st Source Bank.
"They didn't cause the shutdown," Seitz said.
The loans will be offered to 1st Source Bank customers. People or businesses could become customers by opening an account, but it would have to involve direct deposit.
Roughly 2,200 federal employees live in Northwest Indiana, said Micah Pollak, an assistant professor of economics at Indiana University Northwest.
Federal employees who are not receiving a paycheck can get a loan for the amount of take-home pay they would normally receive over 60 days, after providing a recent paystub for verification. The loans will be offered at competitive interest rates and are to be paid back when they receive their backpay.
If the work weeks are completely lost, the bank will work out a payment schedule.
"1st Source believes in keeping our clients' best interests in mind," Seitz said. "We'd like to be proactive with our clients, and help to keep their bills manageable, their lifestyle intact, and their credit rating unaffected. We don't want our clients to suffer or fall behind because of a government stalemate. In our 150 years, we've seen good times and bad, and are happy to help."
The bank will also help business clients with cash flow interruptions because of the government shutdown, and they should contact their business banker to work out an individualized solution.
Anyone interested in the program should call LoanSource at (888) 255-6644 or stop by a branch.
1st Source, which has $4.64 billion in assets, has locations in Chesterton, Hebron, La Porte, Michigan City, Portage, Valparaiso and Westville.