Safe 1 Credit Union

State Employee Assistance Program - 2009

Loan Payment Reduction Program

Background

The current State Budget includes furloughs and other programs which result in reduced pay for employees of various State Agencies. It is our understanding that these reductions are expected to continue through June 2010.

State Employees Assistance Program

Safe 1 Credit Union has a program to help California State Employees affected by furloughs and other budget cutting programs resulting in reduced net pay. If you are a State employee and your paycheck is reduced due to the state budget situation, you may qualify for a loan payment reduction for any consumer loans you currently have with Safe 1.

Questions & Answers

Question:How does this program work?

Answer:This program allows qualifying members to significantly reduce their monthly loan payments with Safe 1. This includes auto loans, recreational vehicle loans, signature loans and personal computer loans.Safe 1 has existing payment reduction programs in place for all members in need, but this special program has been developed specifically for affected public employees.

Question:Who qualifies for the loan payment reduction program?

Answer:Members of Safe 1 Credit Union who currently have existing consumer loans that are paid up-to-date and that are directly affected by the recent budget cuts.

Question:Do I have to apply for the program?

Answer:Yes. Lending laws and regulations require that we obtain signed documents, since this program changes the terms of your loans with us. You may come in to any office or request forms be sent to your home address. All requests are subject to approval, and you will be advised when your payment amount changes.

Question: How much will my payments be reduced?

Answer:The amount of your payment reduction will vary by the loan type, interest rate, and remaining balance. The program is a temporary payment reduction through July 2010. In August 2010, your loan payments will be increased to the original amounts. Essentially, your loan term will be extended slightly over one full year.

Question:Are there any fees to take part in this program?

Answer:All fees will be waived for this program. The original interest rate will remain unchanged, but the total interest paid on the subject loan will increase because the loan term will be extended.

Question: When can I apply?

Answer:The program will be available March 10, 2009. You may apply on that date or anytime thereafter.

Question:What if my Safe 1 loan payment is on payroll deduction with the State?

Answer:During the payment reduction period, we will automatically reduce your scheduled loan payment and the payment difference will be deposited to your Safe 1 savings or checking account.In August 2010, we will revert back to applying the amount of your original payment to the subject loan.

Question:What if the pay reductions last past July 2010.

Answer:We do not intend to extend our loan payment reduction program past July 2010. Based on past legislative history in California as well as economic projection for 2010, it is fairly likely that your pay reduction may continue past July. However, we think our current program provides adequate time for members to adjust their monthlyexpenditures so that they will be able to pay their loans with us at the original payment levels beginning in August 2010.

If you have more questions or want to learn more about our State Employees Assistance Program, contact our CallCenterat(661) 327-3818.

FINAL