Veridian plans interest-free loans if government checks delayed

Iowa's largest credit unions will make interest-free loans available to its members in the event the United States defaults on its debt and Social Security or other government payments are delayed.

Waterloo-based Veridian Credit Union on Friday said it will offer loans to its members in the amount equal to the member's last direct deposit amount from the government. The loans will be interest free for up to 30 days.

Veridian member also can extend their loan payments for 30 days if they do not receive a regularly scheduled federal government payment. Members will have the option of receiving the interest-free loan or extending their loan payments; they will not be able to choose both.

Van Wert, manager of consumer and indirect lending at Veridian, said the uncertainty over whether Congress and President Obama will reach an agreement raising the debt ceiling by Tuesday has led to questions and concerns expressed by members of the credit union.

"No one knows what impact not raising the debt ceiling will have on payments by the federal government," Van Wert said. "We believe Congress will raise the debt ceiling by Aug. 2 and we want to put members' minds at ease."