Debt Ceiling FAQ

May 26, 2023

The debt ceiling is a limit that prevents the federal government from becoming more indebted. The debt ceiling must be raised by Congress.
The first time Congress voted on a debt ceiling was in 1917. Since 1960, Congress has voted on the debt ceiling 78 times.
The current debt ceiling of $31.4 trillion was reached on January 19th, 2023. Since then, the U.S. Treasury Department has been taking "extraordinary measures" to make payments. Some of these measures include borrowing from federal pension retirement plans.
The Treasury Department is running out of "extraordinary measures" that can be taken, which means Congress needs to act.
The good news is, the United States does not solely rely on debt to pay its bills. Like most American households, our nation also has income to help pay bills.
Most of this income comes from tax revenues, with some additional income derived from a few other sources (including annual earnings from the Federal Reserve).
Why does this all matter? There is not enough revenue to cover the cost of all federal programs and activities indefinitely.

Depending on how long it takes to reach a compromise in Congress, some federal bills may go unpaid.
If the United States defaults on its debts and bills go unpaid, it would be unprecedented. This has never happened in U.S. history.
The U.S. Treasury Department would have the authority to determine which bills get paid first.

Yes!
A debt ceiling crisis will not impact access to the insurance fund that guarantees credit union deposits.
More than 90 percent of the $241 billion in member deposits at California credit unions is insured by the National Credit Union Share Insurance Fund (NCUSIF), where members have never lost a penny throughout history. In addition, credit unions in the state have a robust $51.4 billion in liquidity to safely manage daily operations and financial settlements.

It is unclear which bills would get paid first. U.S. Treasury Secretary Janet Yellen would not comment on the priority of bills in a recent interview.
Millions of Americans depend on Social Security checks. From a political standpoint, nobody wants these bills to go unpaid.

Line of Credit
Cash Advance (if there is an eligible credit card)
Overdraft Protection
0% interest rate Payroll Assistance loans for Government Employees from $500 – $5,000.
Deferred payments on RCU loans and credit cards. (Remember to check for any prescheduled payments.)
Early withdrawal of funds from RCU certificates of deposit (CD’s) without penalties
Money management and budgeting information and tools

There is no direct impact to your account. For assistance with specific products and services please contact us.

Yes! Nothing has changed.
A debt ceiling crisis will not impact access to the insurance fund that guarantees credit union deposits.
Redwood Credit Union continues to be safe and sound. We are insured by the National Credit Union Share Insurance Fund (NCUSIF), where members have never lost a penny throughout history.
In addition, credit unions in the state have a robust $51.4 billion in liquidity to safely manage daily operations and financial settlements.

We will offer deferred payments on RCU loans and credit cards.

We will offer deferred payments on RCU loans and credit cards.

There is no impact to our current rates.

Per the terms of your loan, we will not change the terms of your loan without 120 days notification.

Talk to your mortgage loan officer to lock in your interest rate.

Existing loans are not affected. We will keep applicants updated if any of their rates are impacted.