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Sunday, July 21, 2024


When the Government Employees Retirement System resumes lending to GERS members on Oct. 4 after a scheduled hiatus of three and one-half months, borrowers will face new interest rates — higher for personal and automobile loans, but lower for mortgage and land loans.
And from now on, according to a GERS press release, "the system will review loan interest rates monthly, and changes will be made as are appropriate to reflect the average margins" of the lending market locally.
The lending program is now being viewed by GERS as an investment for the system, not "a benefit for the members," GERS administrator Lawrence Bryan said. Rates thus will be set "competitively with other lending institutions," he told Radio One News.
GERS is under pressure to increase revenues into its system, which is paying out more in benefits to retirees than it is taking in through employee and employer payroll contributions.
However, the reason stated for the moratorium on loans was not related to the fiscal concerns. GERS announced last spring that it would impose a moratorium on lending between June 17 and Oct. 4 so the system could be upgraded to Y2K readiness.
"The conversion is just about finished," GERS staff member Patricia Williams told The Source on Thursday, and the system should be Y2K compliant by the time loans are resumed.
The home mortgage rate has been the same since 1985, and the personal loan rate hasn't changed since 1988, the release stated. It said the changes reflect interest rates research, the recommendations of the GERS actuary and independent auditor, and the findings of the most recent audit of the system by the U.S. Interior Department's inspector general.
The new and previous rates, respectively, are as follows:
— Personal loans, 9.5 percent, up from 8 percent.
— Automobile loans, 11 percent, up from 9 percent.
— Land loans, 8.25 percent, down from 10 percent.
— Mortgage loans, 8.25 percent, down from 10 percent.
— Second mortgage loans, 9.25 percent, down from 11 percent.
Application fees are remaining at $50 for mortgage loans, increasing to $25 from $5 for personal loans, and increasing to $25 from $10 for auto loans.

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