Emergency Loan Program Policy and Procedure

In 2004, the Chancellor's Task Force for a Better Workplace recommended the establishment of an Emergency Loan Program. Under the program, emergency loans are eligible to employees for reasons of a severe financial hardship for which the employee has an immediate need for financial assistance. There may be occasions when emergency circumstances, defined as unforeseen, unplanned and unavoidable events, demand immediate attention and require an employee to secure funds on short notice. Examples include a family medical emergency, threatened foreclosure or eviction from a primary residence, or termination of utilities. An initial gift of $25,000 was provided for the program.

The following criteria apply to the Emergency Loan Program:

• Loan Amount: $500 maximum and $50 minimum (subject to availability of funds)
• Interest on Loans:  None
• Loan Frequency:  One loan per 12-month period with no previous emergency loan unpaid; the 12-month period begins on the date the employee picks a check up from Employee Services
• Loan Approval: Director of Employee Services
• Disbursement Authority:  Director of Employee Services
• Term of Loan:  Not to exceed 10 biweekly pay periods or 5 monthly pay periods
• Repayment:  Payroll deduction
• Termination:  The outstanding balance due will be due and payable in the final paycheck if an employee terminates his/or her employment with the University for any reason before the entire loan is repaid
• Eligible Employees:  Permanent EPA or SPA employees with at least one year of continuous University service. Temporary employees are not eligible for loans

Request: Employee contacts the Employee Services Director (or Work/Life Manager) to apply for an emergency loan. Employees requesting an emergency loan must submit an Emergency Loan Request and Authorization for Payroll Deduction form, which includes identifying information, the circumstances of the request, the amount requested, the proposed plans for repayment using payroll deduction, and a statement of loan terms. The employee shall document there are no other resources available for financial assistance, including his/her lending institution.

Approval Documentation: Loan requests approved by the Employee Services Director (or Work/Life Manager) will be documented on the Emergency Loan Request and Authorization for Payroll Deduction form. The form is signed by the borrowing employee to indicate agreement with the loan terms and the obligation to repay.

Disbursement: An Emergency Loan account will be administered by the Office of Human Resources, Employee Services Department. Upon approval, the Director of Employee Services (or his/her designee) will initiate a Check Request. The Check Request shall be supported by the Emergency Loan Request and Authorization for Payroll Deduction form. Payroll Services will ensure that payroll deductions are taken and documentation (authorization for payroll deduction by employees) is maintained. Payment to the employee for the loan amount will be within three business days. Note: Acceptance of an emergency loan may require participation in the Employee Assistance Program and/or attendance in a UNC-Chapel Hill sponsored personal finance class.

Repayment of Loans: Loans are repaid through payroll deduction. A copy of the Emergency Loan Request and Authorization for Payroll Deduction form is transmitted to Payroll Services to establish the payroll deduction.

Loans Receivable Records: The Employee Services Department will maintain the loans receivable records and prepare a monthly reconciliation of available cash and outstanding loans.