California state employees offered low cost loan choices

In the state of California, where a state budget has yet to be passed, state employees are facing a huge pay cut. The governor has asked that until a budget is passed, all employees have their pay cut to minimum wage. Some banks and credit unions are offering a instant loans to these employees, including no-interest installment payday loans.

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Cutting pay in California

The state of California hadn't passed a budget when their fiscal year started on July 1. Without the budget in place, the state of California is facing 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 budget is really passed. The reduction in pay, though, may or may not be possible because, according to John Chaing, the system needs a serious overhaul.

Banks offer impasse loans

Bank of The US and Wells Fargo have began offering no fax loans called “budget impasse” products. The loans are pretty much offered without a credit check and no interest. These loans either provide money or extended credit to state employees. When the state spending budget is passed, employees can be given a retroactive payment that they can use to pay back these impasse loans.

Getting an impasse loan

California state employees who need to get a personal loan to cover the budget impasse do not quickly qualify for these zero-interest loans. The financial institution has to have an existing account with the employee. Given that California has only passed a balanced spending budget by the beginning of the fiscal year in 10 of the last 34 years, it is not surprising that many banks have created solutions to help employees that are left within the dust.