Because California has not yet passed a fiscal-year spending budget, all state employees are facing a cut in their paycheck. California’s governor has asked that all paychecks be cut to federal minimum wage until a spending budget is passed. Some banks and credit unions are offering a cash till payday to these employees, including no-interest installment payday loans.
The California pay cut
The state of California hadn’t passed a spending budget when their fiscal year started on July 1. Without really passing a spending budget, California is going to have a $ 19.1 billion spending budget deficit . The Governor of California, Arnold Schwarzenegger, has ordered that every state employee have their paydays reduced until federal minimum wage until a spending budget is really passed. The state budgeting and payroll system, though, needs an overhaul and state Controller John Chiang said the reduction wouldn’t be possible.
Banks offer impasse loans
Bank of America and Wells Fargo have started offering no fax payday loans called “budget impasse” products. The loans are quite much offered without a credit check and no interest. Instead, state employees are extended extra credit or cash money to make up the gap. When a state spending budget is passed, eventually, the employees will get a retroactive payment they can use to pay off these loans.
Qualifying for impasse loans
California state employees who need to get a personel loans to cover the spending budget impasse do not immediately qualify for these zero-interest loans. Instead, the state employees must already have an account with the bank or credit union. State employees have only seen a balanced budget passed on time in ten of the last thirty-four years – so it’s not a surprise banks are ready.
