As word spread that Gov. Arnold Schwarzenegger threatened to cut state workers' pay, Terry Halleck knew the calls would be coming.

As president and chief executive of Golden 1, she heads the nation's sixth-largest credit union. About 100,000 of its 680,000 members are employed by the state.

They'd want to know: Would Golden 1 help them out?

The answer is a conditional yes. Thursday night, the Golden 1 board finalized plans for a two-tier "state budget loan" in the event Schwarzenegger reduces state employee wages to the federal minimum of $6.55 an hour.

The two-tier program would float short-term, no-interest loans to members who have direct deposit and had joined the credit union before June 30, the last day of the 2007-08 fiscal year. Existing members who signed up for direct deposit after June 30 could qualify for a loan, but it would carry a 4.99 percent interest rate.

Both programs would only be available to state employees who were members of Golden 1 as of June 30. Once a budget deal is signed and state workers receive their retroactive pay, the credit union would recapture its money.

About 850 legislative employees and gubernatorial appointees already have received no-interest Golden 1 loans totaling $1.73 million for the first two weeks of this month, since their pay stopped when the fiscal year ended with no state budget. That group is paid every two weeks.

Extending the program to the 40,000 state workers who are Golden 1 members with direct deposit would cost about $101 million each month, the credit union estimates, and cost about $250,000 in lost opportunities to invest that money. The first payout would be Aug. 28. Most state workers are paid monthly.

Other local banks and credit unions, including North Highlands-based Schools Financial Credit Union and River City Bank, based in Sacramento, also have special loans for state workers who temporarily lose their pay when budget talks deadlock.

On Friday, Halleck discussed how Golden 1 is preparing for the possibility that 15 percent of its members could see their monthly pay reduced to roughly $1,000 per month by Schwarzenegger's actions.

Q: Why would Golden 1 charge interest on some loans and not others?

A: When we have somebody who has already been on direct deposit, it's a lot easier for us operationally. We can use prior payroll data to pay them going forward. We're talking about up to 100,000 state employees. If somebody was an existing member without direct deposit, we have to jump through a lot more hoops. It's a manual process and a lot more work on our end.

The other side is that it's another incentive to drive positive behavior. We want your business long term. And we want to (reward) active members.

Q: What would this cost?

A: It's really an opportunity cost. We would have otherwise had those funds in investments, so we're giving up the opportunity to invest the money and instead we're crediting it to members' accounts.

Q: Is the budget impasse a marketing opportunity? Does Golden 1 gain membership from this?

A: We gain a few. I think more importantly, though, people who trust the credit union have that trust reinforced because we're there for them every year. And we have been for years.

Q: Offering budget impasse loans has become routine, hasn't it? You do it almost every year for legislative workers and gubernatorial appointees.

A: We know it's a possibility every year, and we're prepared every year to stand by the state employees.

Q: With all the strains on the economy and within the financial systems as well, is it harder this year to do something like this?

A: It really isn't. I don't look at it as being harder. All financial institutions have been impacted by the economy and real estate conditions. We're affected by that, obviously, but it's never been a consideration to not (offer state worker loans).

Call The Bee's Jon Ortiz, (916) 321-1043.