State Employees' Credit Union, Raleigh, N.C. this week eliminated the common state CU practice of garnishing wages to collect on delinquent loans — including home mortgages — one of the first institutions to adopt the policy.
"In this economic environment, with the increased financial stress on members from layoffs, furloughs, and cutbacks, wage garnishment can further heighten the family crises that are now occurring to many fine, dependable SECU members," said Phil Greer, vice president of loan administration for the $22 billion credit union.
Wage garnishment, he said, is also highly disruptive to the employer/employee relationship for members who are continuing to work, creating additional stress in the work environment.
North Carolina is one of just four states that allow wage garnishment. The nation's second largest credit union has members in all 50 states, and wage garnishment is legal in the bordering states of Georgia, Virginia, and Tennessee.
The ban on wage garnishment as a collection practice is effective June 1.
