Local financial institutions bracing for depot cuts
by Patrick McCreless
Mar 31, 2013 | 9239 views |  0 comments | 11 11 recommendations | email to a friend | print
Workers leave the Anniston Army Depot in Bynum at the end of their shift. (File photo by Trent Penny/The Anniston Star)
Workers leave the Anniston Army Depot in Bynum at the end of their shift. (File photo by Trent Penny/The Anniston Star)
Don Fomby is preparing for the worst.

Furloughs will likely hit the Anniston Army Depot in the coming months to offset federal budget cuts, forcing Fomby, a depot worker for 31 years, to make some tough financial choices.

With car, mortgage and child support payments, along with high gas costs from his daily commute from Pell City, every cent counts for Fomby, a depot machinist.

"Right now I'm looking at readjusting the mortgage on my house," Fomby said. "I might have to look for a second job."

As Fomby and his more than 3,000 co-workers struggle with how to pay their bills in the coming months, some local financial institutions are likely almost as worried as the workers to whom they’ve loaned money to buy houses, cars and other necessities of life. With the threat of late or delinquent payments, some area banks and credit unions are offering special mortgage and loan deals to assist customers affected by the cuts.

The Department of Defense recently announced that its civilian employees could be furloughed up to 14 days beginning in June due to budget cuts generally referred to as sequestration. The Pentagon had previously scheduled 22 furlough days — the equivalent of a 20 percent pay cut — to begin April 26. However, Congress gave military officials greater flexibility to apportion the automatic budget cuts, allowing the DOD to cut back furloughs by eight days.

In addition to the furloughs, the contracts of the depot's 371 temporary employees expired Saturday, due to the end of the Iraq war and the drawdown in Afghanistan.

Clester Burdell, spokeswoman for the depot, said Col. Brent Bolander, depot commander, has little say in furlough exemptions.

"The decisions are not made at this level," Burdell said. "However, Col. Bolander can request exemptions if he feels it affects safety of life or property."

Shad Williams, president and CEO of Cheaha Bank in Oxford, said he is also concerned about the depot cuts. Williams said Cheaha's main Oxford branch could be particularly impacted due to the high concentration of depot workers there.

"We have reached out to the people who derive income from the depot," Williams said. "We've offered to rework loans for them or help them with additional money."

For the AOD Federal Credit Union, whose core membership is depot employees, budget cuts at the facility are a concern.

"That is certainly a possibility, that the furloughs could have an impact on loan payments and other household expenses," said Richard Simonton, president and CEO of AOD. "We're concerned about our loan delinquencies ... so we're just trying to be a little proactive with assistance."

AOD recently began offering special loans of up to $5,000 for members whose pay will shrink directly or indirectly due to the federal budget cuts. The loans will be available through June 30. The unsecured loans, or loans without collateral, will be available interest-free for the first 60 days and then carry interest rates of 2.9 percent.

Simonton said AOD's standard unsecured loans typically carry interest rates between 5.9 percent and 13.9 percent.

"So 2.9 percent is a pretty good rate for unsecured products," Simonton said.

Simonton said any credit union member affected by sequestration can apply for the loans, not just depot employees.

"That includes, for example, a waitress who is seeing less people coming in and eating due to sequestration," Simonton said.

Curt Sasser, president and CEO of Ft. McClellan Credit Union, said his institution is not taking the depot cuts lightly.

"We're always concerned when people lose their livelihood, whether that be through sequestration or some other situation," Sasser said. "We anticipate higher delinquency levels and some write-offs."

Sasser said his credit union will be offering loans with reduced payments to help any of its members impacted by the furloughs or layoffs.

"When these things do happen, we hope it’s temporary and we try to assist people," Sasser said.

In the meantime before furloughs begin, however, depot safety worker Wallace Gallahar of Bynum will be adjusting his expenses to ensure he'll be able to cover all his bills.

"We have sort of stressed at our household that we'll tighten our belts," Gallahar said. "Instead of making plans for the summer, the recreational things we used to do, until the issue is resolved, we will just not have the money we used to have."

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.
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