The Fair Political Practices Commission says state employees are free to accept interest-free loans during the budget impasse.
The agency said in an advice letter sent to the Senate Banking, Finance & Insurance Committee that employees do not have to report the loans as gifts or income on their statements of economic interests as long as the loans are offered to all state employees who are members of the institutions.
"Let me be absolutely clear: all banks can offer, and all state employees can accept, these loans," FPPC Chairman Dan Schnur said in a statement. "As long as your financial institution offers interest-free loans to all state employees under the same conditions and restrictions, then the forgiven interest portion of a loan to you is not a reportable gift."
Some credit unions are offering low- or no-interest loans to state employees in the case that their pay is withheld or reduced to the federal minimum wage. Legislative employees, whose pay is suspended when there is no budget, also seek loans during the budget impasse.
Click here to read the advice letter.