Alexi Giannoulias, Democratic nominee for State Treasurer stopped in Shelbyville to talk about his idea of expanding the state's military loan program. That program would benefit returning military personnel in the National Guard and U. S. Military Reserves.

Democratic nominee for Illinois State Treasurer Alexi Giannoulias stopped in Shelbyville for a brief visit during his campaign swing through Central Illinois. He talked briefly about his idea of expanding the state-run loan program for military personnel who experience financial difficulties.

“The debt we owe our citizen soldiers who have left behind their families and jobs to risk their lives for our freedom is immeasurable,” Giannoulias said. “We need to do more to assist our military families encountering economic hardship so they can meet their financial obligations.”

Giannoulias’ proposal would expand the state treasurer’s existing Operation Protect and Provide loan program. Initiated following the September 11, 2001, terrorist attacks, the program currently offers bridge loans to members of the state National Guard and U. S. Military Reserve of up to $10,000 at a capped rate of 3 percent.

Zak Sarver of Herrick has just returned from duty in Iraq. He said because of the fact that he is a Staff Sergeant with over 12 years in the Army National Guard the financial burden of serving in the military was not as great for him.

“Some of those personnel I served with who had less rank and time in the military did feel a financial crunch while on active duty,” said Sarver. “Although I did not need it, the military loan program serves a valuable service to reservists and National Guard members.”

He said the employers are required to hold the same job for the military personnel as they had when they left.

“If that person serving had a raise coming up while they were gone they would get that raise when they returned,” continued Sarver.

In its current form, Giannoulias believes operation Protect and Provide is too restrictive and has the potential to disqualify many deserving soldiers from receiving much-needed financial assistance because they do not have exemplary credit histories or the necessary collateral to secure a loan.

Under Giannoulias’ plan, the interest rate cap would be extended to 7 percent and the maximum duration of the loan would be lengthened from 24 to 36 months, allowing soldiers to have greater flexibility in paying them back.

In addition, Giannoulias would expand Operation Protect and Provide by offering “Welcome Home” loans so military personnel returning home could participate in the program. Only members of the state National Guard and U. S. Military Reserve who are called to active duty are eligible to receive the loans under the current program.

“Unfortunately, many of our service men and women face greater financial challenges after completing their military service,” Giannoulias said. “This would establish a safe and secure financial opportunity for our troops as they return from combat. It will help them get back on their feet and get their finances re-established as they make the transition back to civilian life.”

Local resident Greg Borah is a 1st Lieutenant and platoon leader in the Army Reserves who served in Iraq in 2004. He made a good point about reserves and National Guard members who may of owned their own business before being called up.

“People who owned their own businesses like a plumber would have to hire someone to run their business while they were serving and that could necessitate borrowing money when they returned,” said Borah.

Operation Protect and Provide is funded through the state treasurer’s Link Deposit program, which deposits money in banks throughout Illinois for specific programs. Those banks determine whether or not to issue loans at reduced rates to applicants who qualify under the terms of the program.

But participating banks can often deny loans if applicants have even the slightest blemish on their credit record or lack the necessary collateral. By allowing financial institutions to offer an interest rate of up to 7 percent, banks will view the loan as less risk and would be more inclined to approve it. The prime rate is currently at 8.25 percent.

“Our military personnel should not have to take out a high-interest loan from a payday loan store to cover their living expenses and wind up in an endless cycle of debt,” Giannoulias added. “We can help our service men and women meet their short-term financial needs while encouraging banks to offer loans at below prime rates.”

Non-active duty personnel who return home would have up to six months from their date of discharge from active duty to apply for the loan. If approved, the Welcome Home loan would require veterans to use the money for specific uses that include: Consolidating debt, down payment on the purchase of a home, continuing education or job training for themselves or a dependent, or as a supplement to medical or disability payments.

Giannoulias also plans to market the program more extensively and offer more financial education and resources to military personnel and their families.

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