Credit union offers interest-free loans to Illinois lawmakers during pay freeze

Illinois lawmakers stopped getting paid on Thursday. So did Gov. Pat Quinn, who on July 10 used his line-item veto power to halt lawmaker pay until the General Assembly reaches an agreement on pension reform. But a Rantoul-based credit union has come to their aid, offering interest-free loans to state legislators. According to the State Journal-Register,...

Illinois lawmakers stopped getting paid on Thursday.

So did Gov. Pat Quinn, who on July 10 used his line-item veto power to halt lawmaker pay until the General Assembly reaches an agreement on pension reform.

But a Rantoul-based credit union has come to their aid, offering interest-free loans to state legislators.

According to the State Journal-Register, Credit Union 1, which has a branch in Springfield, is open to state employees.

Credit Union 1 President and CEO Paul Simons told The Credit Union Times that legislators who have direct deposit would qualify for zero-interest loans for half their base $5,800-a-month salary for 60 days.

That buys lawmakers a couple of months.

But it seems unlikely that they will reach a meaningful consensus that quickly.

With no consensus on pension reform at the end of a special session in late June, Quinn formed apension conference committee made up of 10 members whose goal was to resolve the differences between the various pension reform proposals on the table, working until a solution was agreed upon.

Quinn gave these lawmakers a July 9 deadline – which came and went with no resolution.

All that’s resulted from Quinn’s latest move – freezing legislator pay – has been a lawsuit House Speaker Mike Madigan and Senate President John Cullerton filed against the state over Quinn’s move, calling it “purely political and unconstitutional.”

For now, many lawmakers have Credit Union 1 to fall back on, temporarily. Simons told The Credit Union Times that even legislators who are not members could qualify for an unsecured loan at 10 percent interest.

Simons also noted that the credit union has offered similar help to state workers during state budget deadlocks in 1991, 2007 and 2009.

Meanwhile, during the current pension stalemate, taxpayers are on the losing end of the fight. Though conference committee members continue to meet behind closed doors, it’s not clear whether any progress is being made. Each day lawmakers delay pension reform, the state’s unfunded pension liability grows by $21 million.

By vetoing legislator pay, Quinn is encouraging lawmakers to rush pension reform – any pension reform – at the expense of continuing to forgo their pay. But that’s not the approach Illinois needs.

The only way to solve Illinois’ pension crisis is to end the state’s defined benefit plan, and give workers retirement freedom and mobility with 401(k)-style retirement plans. State Reps. Tom Morrison, R-Palatine, and Jeanne Ives, R-Wheaton, along with state Sen. Jim Oberweis, R-Sugar Grove, are leading the efforts to modernize Illinois’ broken pension system with a 401(k)-style defined contribution plan for all state workers.