JACKSONVILLE, Fla. – Some military families are reporting difficulties obtaining government shutdown assistance loans from USAA, despite the bank’s public commitment to support members during the ongoing federal funding crisis.
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Multiple military spouses, who were only comfortable sharing their first name, told News4JAX they were denied USAA’s 0% interest assistance loan after the bank conducted hard credit checks, citing debt-to-income ratios as the reason for rejection for some.
“It was just kind of a slap to the face,” Alicia said, a military spouse who was denied the loan. “Why are you pulling hard credit checks? You have to have a little bit of heart and decency to help out the people that help your business run.”
Another military spouse, Dominique, reported being denied twice – once during the 2019 shutdown and again during the current impasse.
USAA representatives explained that the credit checks are necessary because their program offers extended repayment terms of 60 to 90 days. This differs from other institutions like Navy Federal Credit Union, which operates a separate Paycheck Assistance Program that immediately recovers the loan amount when members receive their delayed government paychecks.
The bank reports significant success with its program, having issued over $269 million in loans to more than 71,000 members. USAA is encouraging members who were denied to contact them for a second review of their applications.
While military personnel received pay temporarily, House Speaker Mike Johnson stated that service members won’t receive their Oct. 31 paycheck if the government remains shut down.
Navy Federal Credit Union reported a significant increase in participation in their Paycheck Assistance Program, though specific numbers for this year weren’t provided. VyStar Credit Union indicated they’re seeing applicants who were denied elsewhere seeking loan assistance through their institution.
Some members are reconsidering their banking relationships due to the situation.
“Absolutely not. We will be moving back to Navy Federal,” Alicia said when asked if she would remain with USAA.
The government shutdown has now entered its 16th day, continuing to impact federal employees and military families across the country.