WOCCU’s Brian Branch calls for Emphasis on Consumer Protection and Education
At a recent roundtable event with the Organisation for Economic Cooperation and Development (OECD), Brian Branch executive vice president of the World Council of Credit Unions (WOCCU) called for a greater emphasis on consumer protection and education. The event was attended by 250 leading policymakers and executives from leading organisations around the world.
Branch argued that this is approach is central to the fight to slow economic decline and the global recession and held credit unions as an example of how such a strategy can be a great success. He guided delegates through the criteria credit unions around the world use to define their purpose – education, integrity and an emphasis on meeting member needs; putting people before profits.
“Credit unions safeguard consumer interests in terms of quality, price and safety,“ Branch said. “Providing financial services in ways that do no harm and improve consumers' economic wellbeing and prosperity have helped credit unions, communities and even countries grow.“
Where institutions provide services that reach beyond the bare minimum of statutory requirements, integrity is key. Consumer demand for greater transparency, including fee and interest rate disclosures, will help drive greater ethical practices among financial institutions worldwide, a position Branch urged policymakers to implement within their own countries.
“Thanks to the Internet, there is greater access today to financial information, which creates the demand for greater transparency,“ Branch said. “However, an ongoing lack of financial literacy among consumers can increase household debt, which eventually puts a strain on financial providers and affects the markets they serve. Stronger efforts to educate and protect consumers will result in better conditions for all. “
“The fact that OECD called on WOCCU to lead the discussion in this area speaks to their understanding of the importance of the credit union model,“ Branch added. “The positive response received from roundtable participants indicates that more people have come to appreciate what financial cooperatives can do for members. “
19 Jun 09 -
Hull and East Yorkshire Credit Union is Ten
Hull and East Yorkshire Credit Union (HEYCU) celebrates its tenth anniversary this month.
HEYCU was set up in 1999 by a small group of council employees and now boasts over 6,000 members managing £3m in savings on their behalf. Over the past decade, HEYCU has made 13,500 loans at a value of £11m.
HEYCU is a great success story and an asset to the credit union movement.
John Smith, founder and HEYCU secretary, said, “Satisfied members tell their families, friends, work colleagues and neighbours about us and more and more people are joining every week.
"The credit crunch has also brought more people through our doors as they regard us as a trusted local alternative to high street lenders. They like the friendly service and the fact that we are working for them and not trying to make money out of them."
19 Jun 09 -
The Big Two Oh for Glasgow Credit Union
Set up in 1989, Glasgow Credit Union (GCU) celebrates 20 years serving the people of Glasgow today (19th June).
GCU has grown to be the largest credit union in the UK offering the full array of banking services including savings, personal loans, CUCA, insurance and mortgages. It recently launched Cash ISA and Child Trust Fund accounts.
June Nightingale, CEO and founder said: “The loyalty and retention of our members is the main reason for our success over the years, coupled with the dedication of our volunteer Board of Directors and friendly staff. As many members prefer to keep all their finances with the Credit Union, the membership can be recognised as the driving force behind our development and motivation to offer new services.”
On the recession she added, “With steadily growing assets of over £64 million and reserves of £10 million, we are defying the Credit Crunch. Last year saw a £7 million rise in unsecured lending and a thirty percent increase in mortgage applications. Additionally £6 million has been deposited by members to the savings balance. Our prudent management of funds over the years means that in the midst of the recession, we are in such a strong position as we celebrate our twentieth Anniversary and look forward to continued growth.”
19 Jun 09 -
Partners Credit Union Moves
Liverpool’s Partners Credit Union has moved into new premises in a prominent position on one of the main high streets in the city.
To celebrate the opening of the Dale Street premises, Partners plan an ‘Open Day’ between 3 and 5pm on Friday the 26th June. Staff will be giving tours and telling people about the fantastic services that they offer the people of Liverpool.
Tracey Schuler said, “This is going to be a great day for us as we officially launch our new facilities – I’m sure people will be impressed.”
02 Jun 09 -
Tiny Fraction of Complaints to Ombudsman About Credit Unions
Last week’s annual review published by the Financial Ombudsman Service (FOS) highlights the quality service that credit unions provide to their members. Only one out of every 46,000 complaints received related to a credit union during 2008/09 – a tiny fraction relative to credit unions’ market share.
Mark Lyonette, ABCUL Chief Executive, said: “This is evidence of the fantastic service that credit unions are providing to their members up and down the country. Credit unions are setting the standard for welcoming, helpful and beneficial financial services in tune with their members and receptive to their needs.”
“Such a stark contrast with our competitors is an affirmation of the strength of the credit union model.”
To read the FOS' full annual review, follow the link below.
The theme for this year’s International Credit Union Day has been announced by the World Council of Credit Unions.
The theme, Your Money, Your Choice, Your Credit Union, is set to remind people everywhere of the advantages that credit unions offer to their members in these difficult financial times - value, trust and service and fair access to affordable financial services.
The ICU day, to take place on 15th October, is a chance for people to celebrate the great strengths of our movement and to extend our welcome to more people across the world.
See the link below for access to promotional materials and details of how to get involved.
Credit unions feature in a money supplement published this month by Which? The Make your money work harder supplement contains a two page spread on credit unions, which says it is time to think again if you think there are no alternatives to the big banks.
“There is a little chink of light in the current economic gloom, “ the article states, “Until recently, community based credit unions may not have been the first place that cam to mind if you wanted to save or borrow, but some are now offering members savings that are better than anything you’ll find on the high streets.”
Using figures from Credit Union News, the article compares the cost of small loans and shows how competitive credit union rates can be. It also cites great savings rates from a number of credit unions include No.1 Copperpot’s 4.75% Cash ISA and Transport Credit Union which is paying 3.5% on its ordinary savings, 4.5% on its 30 day notice account and in Which?’s words “a massive 5.75%” on its 60 day notice account.
Thanks to Which? the article is available to download from here.
Report Encourages Local Authority Support for Credit Unions
A new report from the New Local Government Network has highlighted the roll that local authorities can play in supporting credit unions and increasing the supply of affordable credit union their communities. Circling the Loan Sharks - Predatory lending in the recession and the emerging role for local government points out that a combination of factors including the reduced availability of regulated ‘sub-prime’ credit is leading to a situation where many people may have little option but to borrow from illegal sources.
The report highlights a number of examples of local authority support for credit unions including in North Yorkshire, Lambeth, Manchester and Staffordshire. It also recommends a number of policy options local authorities should adopt to support credit unions including offering premises, sharing facilities and offering marketing support; offering adequate financial support to provide capital for affordable lending; establishing new credit unions and acting as a catalyst where third sector lending is insufficient.
The report also recognises that credit unions have benefits for the whole community, especially as many have lost confidence in the global banking system and recommends advocating credit unions as a sound and reliable facet of the banking industry.
In welcoming the report ABCUL Chief Executive Mark Lyonette said: -“Local authority support for credit unions, which should include advocating the use of credit unions by savers in the community, as well as for those on low incomes who need to borrow, is key in achieving sustainable growth in credit unions.
“We welcome the report from the New Local Government Network, which recognises the important role that local councils can play in supporting quality credit union services in their areas.”
The European Network of Credit Unions has launched a new website to promote credit unions with the European Union. ABCUL is one of the five founding trade association members of the Network which is working with the support of the World Council of Credit Unions to ensure appropriate and proportionate regulations for credit unions across Europe. The Network acts as an information exchange and enables credit union associations in Europe to speak with one voice as is carries out its work to: -
· Educate EU policymakers on what a credit union is, how it is structured and what services it provides
· Raise awareness of the social role credit unions play, both in European countries and worldwide
· Formulate positions on EU policies identified as highly important to the credit union movement
· Advocate these positions vis-à-vis EU decision-makers
· Engage in an open dialogue with policymakers and other stakeholders
The site also provides an overview of the credit union movement in Europe and worldwide and contains details of the work that the Network is doing to ensure the benefit of credit unions is recognised by European policy makers. Stories from credit union members in Glasgow and London are used on the site to illustrate the benefits to individuals of credit union services.
The other founding members of the group represent credit unions in Ireland, Macedonia, Poland and Romania.
Credit Unions in Scotland: House of Commons Report Welcomed by Sector
ABCUL has welcomed a new Parliamentary report which applauds the efforts of credit unions as responsible lenders and supports their valuable work for both communities and individuals. Credit Unions in Scotland, published today by the Scottish Affairs Committee, examines the current state of the sector and sets out proposals for its future development.
According to the report, the provision of low-cost, responsibly-lent finance is crucial to mitigating the debt crisis, and encouraging a saving’s habit is vital if we are to create a generation of financially responsible people. The credit crunch has led to a dearth of widely available credit for those on low incomes, so there has never been a better time for credit unions to build on their existing success and raise their public profile.
Mark Lyonette, Chief Executive of ABCUL, says: “Credit unions appreciate the wholehearted support for the sector spelt out in the report. Credit unions play a vital role in our communities and their services are popular and successful.”
The report calls on the Government to provide financial backing to enable more credit unions to offer current accounts and encourages credit unions and the Post Office to work together to establish the best way to provide bank account facilities to the financially excluded.
It recommends that consideration should be given by the Scottish Government to raising the level of ring-fenced credit union funding to ensure that credit unions are able to provide the services they offer to all those in need of them. But the report does acknowledge that credit unions can apply to a £42 million pot of funding for social enterprise, something that ABCUL is encouraging its members to do.
The publication proposes that the Government should introduce a requirement on local authorities to make premises they own available to credit unions if they are vacant, and that an appropriate percentage of commercial premises in busy locations is let to non-profit organisations at a suitable rate.
It also says that the Government should provide funding to promote credit unions across the UK to a wider public as an integral part of a comprehensive strategy of financial education.
Mohammed Sarwar, Labour MP for Glasgow Central and Chairman of the Committee, says: “Never has it been more important for credit unions to be seen as a genuine alternative to mainstream banks. Credit unions can provide a valuable service to individuals, entire communities, as well as helping to encourage a culture of responsible saving. But Government support must be in place to enable this to happen and we urge the Government to do more, and to do it now.”
York Credit Union opens its doors to the whole of North Yorkshire
From today, anyone living or working in North Yorkshire will be able to access the services of the new North Yorkshire Credit Union.
Resulting from the extension of York Credit Union’s common bond, the new service is the result of dedicated partnership working between the County Council, multiple district Councils, and three Housing Associations – together investing almost £350,000 – in addition to local businesses and building societies. North Yorkshire’s common bond now becomes one of the largest in Britain.
The service is to be rolled out first to Selby and Scarborough – two areas identified as having a chronic lack of affordable credit – with further branches to be opened across the county in the coming months.
A package of products are being considered alongside the new branches, including a fully functional online service and potential partnering with paypoint, in the concerted effort to extend services across the largely rural area.
Development Manager Mike Horncastle said: "We're delighted that we can now provide a service to the whole of North Yorkshire.
"We'll be developing additional services in the coming months, giving members a real alternative to the high street financial institutions currently experiencing a lack of public confidence."
15 May 09 -
Erewash Credit Union Praised by Prime Minister
Erewash Credit Union was praised by Gordon Brown in the House of Commons on Wednesday. In response to a question from Erewash MP and Credit Union All Party Parliamentary Group member Liz Blackman, who spoke about the £170,000 the credit union has saved local residents in interest payments through providing Growth Fund loans, the Prime Minister said: -
“In the Budget we added an extra £18.5 million to help the credit funds. More than 100 credit unions have already benefited from that fund, and more than 150,000 people are being helped. I know that the credit union in my hon. Friend's constituency is a shining example of what is possible, with 700 people obtaining affordable credit. It is making new investment to help people with housing, which is desperately needed in her area. I congratulate her credit union on doing a fantastic job. We want to support credit unions in every part of the country, with both more support and more legislative backing in future."
Representatives from Erewash Credit Union were among the guests at a local school where Gordon Brown and several members of his cabinet launched Labour’s local and European election campaign yesterday.
15 May 09 -
Birmingham’s Citysave Credit Union Embraces the Digital Age
Citysave credit union has announced plans to offer its services via a local, interactive, digital TV channel.
Linking with Digital Birmingham, residents across the city will be able to discover more about the credit union’s services and gain access to them from the comfort of their own home without the need for internet access. Plans are also in the pipeline to make the service available on people’s mobile phones.
Deputy Leader of Birmingham City Council, Paul Tilsley said: “Credit Unions are a great triumph for local democracy, and by making Citysave available through our local channel, we're adding to the extensive range of council and public services that residents can already find through their TV”
“Just as importantly, we're ensuring that people without a PC, or those who find it hard to get out and about like the elderly or those with disabilities, can still take advantage of the superb services of the credit union from the comfort of their own home.
"In the era of the credit crunch, this development couldn't be more timely or appropriate."
The TV Channel is available from all major digital television providers, and comes as more evidence of how credit unions are moving into the twenty-first century.
15 May 09 -
Camden Plus’ New Branch Opens its Doors
Friday 24th April saw Camden Plus Credit Union open the doors at its new branch in the heart of the area, just off Camden High Street. Council Leader Keith Moffitt and Deputy Leader Andrew Marshall did the honours in a milestone for the area.
Camden Plus opened in 2006, with council support, and the new premises offer great opportunities for the credit union to grow and extend its services to many more people.
Cllr Moffitt said, "Credit unions provide a valuable service for local people, that's why the Council committed funding to Camden Plus Credit Union as it got itself established. It's great news that these new premises mean they can continue to help local people. While we all need to make our own decisions as to where we put our money I have taken a personal decision to open up an account today."
Manager, James Richard added: “The new branch is a significant milestone in the credit union’s development. Our convenient location close to Camden High Street and Kentish Town will allow us to better serve our existing members and attract new members who are looking for friendly, personalised service.”
The opening marked the start of a weekend-long grand opening event and the beginning of a bright future for Camden Plus.
05 May 09 -
New Cross-Party Group on Credit Unions
The Scottish Parliament has officially approved a new Cross-Party Group on Credit Unions.
Following the successful launch of the All-Party Parliamentary Group on Credit Unions at Westminster last summer, this new group will ensure credit unions remain high on the agenda at Holyrood as well.
Members from the SNP, Scottish Labour, Scottish Conservatives and Scottish Liberal Democrats have registered to join the group which seeks to discuss issues, develop policy and promote the positive role of credit unions in Scotland.
Labour and Co-operative MSP Frank McAveety worked with ABCUL to initiate the group and will be the convener, and John Wilson MSP (SNP), Mary Scanlon MSP (Conservative) and Robert Brown MSP (Liberal Democrat) will be the vice-conveners. The treasurer is James Kelly MSP (Labour and Co-operative).
Over a quarter of a million Scots are members of credit unions, saving over £200m and borrowing £150m at much more affordable rates than many other lenders offer. In the wake of the banking crisis, even more Scots are joining credit unions, with some reporting a tripling of new membership applications from the same time last year.
ABCUL’s Policy Officer for Scotland Frank McKillop, who will be the group’s secretary, said: “This new Cross-Party Group means there will be a meeting specifically about credit unions at the Scottish Parliament every few months, and MSPs from all parties will have an opportunity to discuss the challenges and opportunities for the credit union movement in Scotland on a regular basis.
"We’re proud that credit unions enjoy genuine cross-party support in Scotland and we look forward to building upon that in the coming months and years.”
We're very sorry to announce that contrary to our earlier posting, the dates for the ABCUL Autumn Conference have had to be changed. We realise that this is likely to cause significant inconvenience and apologise for this.
The new dates are Friday October 30th – Sunday November 1st 2009.
The location is: Forest of Arden, A Marriott Hotel & Country Club, Birmingham.
Again, apologies for any inconvenience caused.
For further enquiries please contact Clare or Emma at ABCUL Head Office (conferences@abcul.org).
29 Apr 09 -
Malcolm Wicks’ Bill has Second Reading with Great Support for Credit Unions
On Friday 24th April, the Co-operative and Community Benefit Societies and Credit Unions Bill received its second reading and went on successfully to the committee stage. MPs from across the political divide took the opportunity to express their great support for the movement.
The Bill, which proposes to give secondary powers to parliament to enable modernisation of the Credit Union Act and make other change to Industrial and Provident Society legislation, passed through its second reading receiving great support and without a hitch.
Malcolm Wicks, in introducing the Bill, said: “Credit unions have also been prolific in supporting savings initiatives such as child trust funds and individual savings accounts. They have historically operated in areas of economic and social deprivation, often being the only means of engagement with the financial system for many who have been financially excluded. They offer an affordable alternative to unscrupulous doorstep lenders, some of whom have been known to charge annual percentage rates that exceed 200 per cent., contributing to increasing debt and misery for thousands of families.
“Credit unions are the decent alternative to both the high street banks, which often, sadly, offer little to low-income groups, and the foul loan sharks, charging extortionate interest rates, who stalk single mothers in our most deprived communities.”
Both the Liberal Democrats and Conservatives also came out in support of the Bill and credit unions.
Lib Dem, John Pugh said: “Credit unions address the issue of financial exclusion. They deal with people who cannot use banks or who are uncomfortable with using banks. I dare say that more people than ever are uncomfortable with using banks these days. Certainly it is best that such people avoid the loan sharks ... or the pawnbroker, with all the horrific consequences that they often entail... Credit unions often start in working-class areas and provide a method for the community to pull itself up by its own bootstraps, but an unstated and important aspect of their role, which is often missed, is informal financial education.”
Mark Hoban, Conservative Shadow Financial Secretary to the Treasury, commended the Bill’s provisions to modernise credit union legislation but added a note of caution following concerns expressed by ABCUL and our members: “It is important to ensure that we do not simply railroad the changes for building societies through wholesale in relation to credit unions as well. As the sector develops and strengthens, we need to ensure that the changes are made in consultation with the sector. We should not lose sight of the unique features of the credit unions; we must ensure that the law preserves them.”
The debate illustrates the overwhelming support and well-deserved political recognition for the credit union movement and the work it does. Changes to legislation are welcomed as far as they will help credit unions to carry out their difficult work, but their right to be consulted upon before any change in the law is enshrined in the Bill, also.
Coupled with the Legislative Reform Proposals published recently, the progression of Malcolm Wicks’ Bill marks another important step towards gaining the modern, flexible and progressive legislation that credit unions have been working towards for many years.
Ahead of the second reading of the Co-operative and Community Benefit Societies and Credit Unions Bill, Malcolm Wicks spoke at Croydon Savers Credit Union’s AGM on Monday 20th March.
He said: “Co-operatives have a long and distinguished history, but I believe their best days are yet to come. They owe no allegiance to shareholders, but rather to their own members. Co-op stores trade ethically and have a strong sense of social responsibility.
“Credit unions offer the great alternative to the banks. More critically, they offer a safe alternative to those wretched loan sharks that prey on too many vulnerable Croydon families. My Bill, which has all Party support, will put the law governing co-ops and credit unions on a firmer footing, so that they can flourish in the years to come.”
He now plans to join the credit union as he publicly announced in during the second reading debate of his Bill in the House of Commons on Friday.
Helen Mason, Director of Croydon Savers, had this to say: “As a credit union, Croydon Savers is unique amongst financial institutions in encouraging saving rather than borrowing, whilst at the same time providing low cost loans to local people at times of need.
“As a co- operative, the credit union shares its profits with its customers and is paying a dividend of 1% on savings at a time when banks are cutting interest rates. Borrowers from the credit union also benefit from a 1% rebate of interest paid on loans.”
Malcolm’s appearance and kind words of support, in addition to his pledge to join Croydon, go even further to cement his support for the movement after his welcome endorsement of the Bill.
29 Apr 09 -
Autumn Conference Dates Announced
This year's Autumn Conference is set to take place on the weekend of the 13th to the 15th November 2009 in Birmingham.
Keep this date free in your diaries!
Further details will follow when they are available but any provisional enquiries should be directed to Clare and Emma at ABCUL Head Office (clare.atkinson@abcul.org and emma.johnston@abcul.org).
29 Apr 09 -
East Kilbride Credit Union receives Volunteer Award
East Kilbride Credit Union has received the SoLVE Volunteer Centre Quality Standard Award recently in recognition of the support they give to their volunteers and the benefits that volunteers gain from the experience.
On receipt of the award Manager, John Lange said: “East Kilbride Credit Union could not operate so successfully without the volunteers offering their time and expertise to members of the public.
“I am extremely grateful for all their hard work and efforts.
“This award goes to show we are able to offer our volunteers a rewarding time when they come to offer their services.”
ABCUL has welcomed the Chancellor’s announcement in today’s Budget of an additional £18.75 million for the Growth Fund, which credit unions use to make affordable loans to people on low incomes. This will allow an extra 85,000 loans to be made over the next 2 years.
Mark Lyonette, Chief Executive of ABCUL says: “Our credit union members are thrilled by the Government’s commitment to greatly increase the amount of money that will be made available through credit unions to help those most in need of financial help, who may otherwise turn to loansharks and high cost doorstep lenders.
“The announcement in the Budget is a huge vote of confidence in the valuable work that credit unions are doing around Britain.”
Responding to a recent survey, 70% of ABCUL credit unions reported an increase in demand for loans from members on a low income over the last year, with 32% reporting that this increase was significant. These findings highlight the necessity of additional funding to help those who are being hardest hit by the recession.
Mark Lyonette adds: “We’re pleased to see the Government recognises that, whilst it is important to make sure people who are having trouble paying mortgages are given assistance, there is also a need to ensure that money is available for unsecured lending for people on low incomes.”
A £500 loan repaid weekly over a year from a doorstep lender could cost over £400 in interest. The same loan from a credit union would cost no more than £64 in interest, saving the borrower over £300 and keeping money in the community.
The Growth Fund, which was launched by the Government in December 2004 as one of a number of measures to promote financial inclusion, increases the availability of affordable personal loans through third sector lenders such as credit unions.
In March 2007 the Fund was increased by £6 million to £42 million and in December 2007 a further £38 million was allocated for the period 2008 to 2011. Total investment in the Growth Fund to date stands at £80 million.
15 Apr 09 -
Three Cheers for Legislation Reform Proposals
ABCUL has welcomed the publication of a Government response to last year’s proposals to introduce a Legislative Reform Order to update the legal framework which governs credit unions in Britain.
“It’s great news that, following a comprehensive consultation to which we and our members responded, the Government has now finalised proposals for a Legislative Reform Order to update credit union legislation in Britain,” says Mark Lyonette, Chief Executive of ABCUL. “This reaffirms the Government’s commitment to updating credit union legislation, which is badly needed by the sector if we are to fulfil our true potential in Britain.
“In particular, we are delighted that the Government has listened to our calls to increase the limit for a common bond (which determines who can join a credit union) to two million people for geographical common bonds only and not to impose a numerical limit on common bonds which only cover people with an employment or associational link. This will enable credit unions to meet the needs of many more people.
“We are also very happy that the Government has decided to allow credit unions to choose whether to offer ordinary shares or deferred shares to corporate bodies. This means that companies and social enterprises, as well as unincorporated bodies and partnerships, will be able to become full members of credit unions, allowing large numbers of organisations to benefit from credit union services for the first time.”
Mark Lyonette adds: “We are now looking forward to welcoming the early publication of the draft Legislative Reform Order and to credit unions making great use of the many opportunities that will be open to them.”
ABCUL and Manchester Credit Union are among the new providers for the Government’s Moneymadeclear service, launched today in the North West and North East of England.
The new service aims to help people tackle their money worries and make informed financial decisions with confidence, whether it’s avoiding debt problems, coping with a change in circumstances, or preparing for the future.
People can now access the service at www.moneymadeclear.fsa.gov.uk , via the Moneymadeclear helpline on 0300 500 5000 and face-to-face through regional partner organisations and charities, including credit unions.
ABCUL will be employing money guides to pilot a mobile money guide service to help credit union members across the North East of England to access face to face guidance. Members of Manchester Credit Union along with tenants of partner organisations will be able to access money guidance through a scheme run by the credit union across Manchester. The Police Credit Union, which has promoted Moneymadeclear online tools to its members since they launched, is also getting involved in promoting the new service.
Enterprise Credit Union has been providing the service since April and has had a good response from members for the new service.
Moneymadeclear will test the blueprint for a national ‘money guidance’ service recommended by the Thoresen Review of generic financial advice. The £12m pathfinder aims to reach up to 750,000 people in the North West and the North East of England by spring 2010 and is being delivered by the FSA in partnership with the Treasury.
09 Apr 09 -
Co-operative and Community Benefit Societies and Credit Unions Bill Published
A new Bill designed to allow legislation governing credit unions and Industrial and Provident societies to be more easily brought up to date has been published. The Co-operatives, Community Benefit Societies and Credit Unions Bill 2009 was introduced by Labour/Co-op MP Malcolm Wicks as a Private Members Bill and will be debated by MPs at its second reading on the 24th April.
The Bill has the support of Government and follows a review of co-operative and credit union legislation which was carried out in 2007. Amongst the changes that are being proposed in the Bill are a name change from “industrial and provident society” to either “co-operative” or “community benefit society”, giving HM Treasury powers to make certain changes to credit union legislation to bring it into line with that of building societies and to bring aspects of legislation for industrial and provident societies into line with that of companies.
The full Bill and accompanying notes are now available at www.parliament.uk
09 Apr 09 -
Is a not-for-profit home credit business feasible?
Research published by the Joseph Rowntree Foundation has shown that whilst there would be some cost savings for consumers using a not-for-profit home credit service, interest charges would still have to top 100% and would require significant subsidy.
Is a not-for-profit home credit business feasible?, carried out by a team of researchers including Elaine Kempson from the Personal Finance Research Centre and Paul Jones from Liverpool John Moores University demonstrates that home credit is an inherently high cost product and even with a not-for-profit model, will still mean people on lower incomes paying a much higher rate for small loans than they would through a product they can repay electronically or by visiting a branch.
Credit unions which took part in the research had little appetite for delivering such a service so the researchers considered that a stand alone provider would seem to offer the best delivery option.
The researchers calculated that with an £18 million subsidy, the APR on an average 56-week £288 loan from a stand alone, not-for-profit provider would be 123 per cent (compared with 183 per cent commercially), bringing customer savings of £50. But to achieve a reduction to a 100 per cent APR would require a £90 million subsidy. Customer savings would increase to £72 per loan (£170 yearly on an average annual loan frequency of 2.34). They concluded that this may be insufficient to attract good payers. Cross-subsidy would be required from other products such as insurance, savings and cheque-cashing.
The full report and a summary are available to download from the website of the Joseph Rowntree Foundation, which provided funding for the research
Greens Deputy Adrian Ramsey Calls for Support for Credit Unions
Green Party Deputy Leader Adrian Ramsay called on the Government to promote credit unions and ethical banking in his speech to the party’s Spring Conference in Blackpool earlier this month.
Mr Ramsay, who is a councillor and prospective parliamentary candidate in Norwich said: -
“Look at the financial institutions that are weathering this storm. They are the ethical banks – the banks that people trust with their money. They are the mutual societies and credit unions that share their profits among their members.
“Why are they doing so well? Could it be because they didn’t gamble people’s money in the global marketplace? While big commercial banks played Russian roulette with virtual dollars, ethical banks and mutuals invested in real projects, supporting local businesses and social enterprises.
“People have stuck with ethical banks and mutuals, not just because their money is safer, but because their profits don’t come at the price of human lives. Have you ever heard of a credit union investing in the international arms trade? Or an ethical bank that funds sweatshops and deforestation? “
When members of the Group of 20 (G-20) nations attend The London Summit 2009 on April 2, they will be armed with the knowledge that credit unions and financial cooperatives worldwide have contributed to the solution rather than cause of the struggling global economy. Communications from World Council of Credit Unions (WOCCU) delivered prior to the meeting alerted attendees to the role credit unions play in their countries, both in serving members and contributing to economic stability.
WOCCU originally made its voice heard last autumn in a formal letter submitted to G-20 countries attending the Nov. 15 summit in Washington, D.C. The letter, addressed to participating finance ministers, asked the group to acknowledge the strength and safety of credit unions and financial cooperatives and to not make cooperatives part of inappropriate legislation or regulations that may restrict the very practices that give member-owned institutions their capability to serve.
As a result of its November meeting, the G-20 established four working groups, one of which focuses on supervision, enhancing sound regulation and increasing and strengthening transparency. WOCCU sent a formal letter addressed to committee co-chairs Rakesh Mohan, deputy governor of the Reserve Bank of India, and Tiff Macklem, associate deputy minister of the Canadian Ministry of Finance, outlining the role of credit unions and their supervisory structures.
"We also have been in communication with the World Bank representative who sits on the committee," said DaveGrace. "He assured us that credit unions are not within the scope of the regulatory review."
Prior to the November G-20 meeting, a letter from Pete Crear, WOCCU president and CEO, requested that three distinct steps be taken during the autumn summit:
1. That any future financial rescue packages implemented at global or national levels be unbiased against cooperative financial institutions relative to the commercial banking sector.
2. That in any pronouncements emanating from the summit, cooperative financial institutions be recognized as secure, locally owned financial institutions that have presented safe and sound financial alternatives during the current crisis.
3. That future regulations or legislation that may result from this crisis clearly recognize that cooperative financial institutions have not been the source of these problems, have been significantly less affected by the economic fallout and should not be punished by inclusion in a series of new rules designed to correct a problem they have not caused.
"We believe strongly that cooperative financial institutions must be consulted prior to any regulatory actions that may affect them," Pete Crear wrote, "and we urge you to make this step a permanent part of your protocols."
Dave Grace added. "As seen from past financial crises at national levels, during this global crisis credit unions have performed better than many other financial institutions. We are unaware of any credit union in any market that has received capital infusions from government as a result of the current crisis."
26 Mar 09 -
Link-up for learning
ABCUL, through the Credit Union Foundation, has linked up with Home Retail Group to expand access to financial education and savings accounts for children and young people in schools.
Home Retail Group, whose brands include Argos and Homebase, has been working with ABCUL since 2004, when the Argos ‘A card’, which offers credit union members a discount on goods in Argos and Homebase stores, was introduced.
As a financial services provider as well as a retailer, Home Retail Group recognises a general need to build financial confidence amongst consumers – especially in these challenging economic times – and whilst they have an opportunity to influence this directly with their own customers they believe it is also important to contribute to this in a wider context.
The Group has decided to support a community based project which will help to enhance financial understanding and capability amongst children and young people, and this will become a key element of its Corporate Responsibility programme in 2009.
Cathryn Cotterill, Head of Regulatory Compliance for Home Retail Group Financial Services, says: "Given the growing importance of credit unions and our existing relationship with the credit union movement, ABCUL was the obvious place for us to go to explore ways to provide this support.
"After a number of discussions to identify potential areas where we could support ABCUL it became clear that a project to research and support the role of credit unions in schools would be an ideal project for us to undertake.
"We’re delighted to be working with ABCUL in this important area and we hope that the findings of this project will provide the foundations for credit unions to play an important role in the financial education of young people."
Annette Warne-Thomas, Head of Business Development at ABCUL, adds: "This project provides ABCUL and Home Retail Group with an important opportunity to work together on the development of financial education in schools with a particular emphasis on the importance of saving.
"The unique nature of credit unions allows them to not only work with schools on educational sessions on personal finance but for children to learn by doing, i.e. by actually starting a savings habit."
26 Mar 09 -
Antony MacRow-Wood Becomes New ABCUL President
Antony MacRow-Wood took over as the President of ABCUL at ABCUL’s AGM on the 14th March, as Mary Henderson’s term came to an end and she stepped down from the ABCUL board after 9 years of dedicated service to the Association.
Antony has been an ABCUL director for the South West region since 2002 and has served as ABCUL Treasurer since 2006 and as Deputy Treasurer for four years before that. He has been involved in credit unions since 1993, when he helped form the Parks and Walcott Credit Union. When Antony moved to Dorset, he helped enlarge the First Dorset Credit Union and then assisted in the merger of 3 credit unions in the Poole and Bournemouth area to form Coastal Credit Union, of which he is currently Vice-President. He is also leading a working group to establish an employee credit union for the Church of England.
Antony is currently a Team Rector in Poole and before becoming a priest, worked as a Chartered Accountant.
Antony said: -
“There are both great challenges and great opportunities for credit unions during the current economic turmoil. We need to help our members weather the storm but also be in a position to seize the opportunities which arise as people turn from the banks in search of a mutual ethical alternative”.
“I’m delighted to have been selected as ABCUL President and look forward to working with the ABCUL Board, the CEO Mark Lyonette and his staff team, to ensure that ABCUL continues to build on and develop the services that our credit union members need. I would like to thank Mary Henderson for her valued input to the work of ABCUL and while I wish her well for the future, I am sure that she will be no stranger to the credit union movement she has given so much to in the past.”
26 Mar 09 -
Credit Unions Thanked By PM
Representatives from credit unions across the country were guests at a Number Ten reception held last week to thank people working in front line advice agencies. Credit unions which have been delivering Growth Fund loans were at the event along with representatives from agencies which have been delivering face-to-face money advice with funding from the Financial Inclusion Fund.
Annette Warne-Thomas from ABCUL and credit union representatives from Bristol, Capital, Enterprise, Hampshire, Southwark, Waltham Forest Community, Weston Super Mare and District, Llandudno and Clockwise (Leicester) Credit Unions all enjoyed visiting Downing Street and meeting Gordon Brown. The Prime Minister took time to speak to guests and spoke about the value of the work credit unions and advice agencies are doing with support from the Financial Inclusion Fund.
The Prime Minister is pictured talking to Karen Bennett from Enterprise Credit Union along with Irene Dillon from Enterprise Credit Union and Kate Hanks from Bristol Credit Union.
17 Mar 09 -
Annual Conference and AGM a Resounding Success
This weekend saw ABCUL’s Annual Conference and AGM sweep through Hilton Blackpool.
The weekend was a great success and offered the delegates a chance to hear about the progress, and impending publication, of the Legislative Reform Order that is set to revolutionise the work that credit unions do and release the latent potential within many. Sue Lewis, Head of Savings and Investments at HM Treasury updated ABCUL members on progress with the legislation and Chris Hibben from the Financial Services Authority spoke about impending regulatory changes which the FSA will consult on in the next few months.
There were also opportunities to attend training courses and workshops on a range of subjects from credit union directorship, to the Savings Gateway; links with Housing Associations to Paul Jones’ Credit Unions: Ten Years On – a look back at the development of the movement a decade after his pioneering research project. Delegates went away with a host of new ideas and perspectives on taking their credit union forward and also benefited from getting together again and sharing experiences.
17 Mar 09 -
Credit Unions in the Scottish Economy - a Scottish Parliamentary Reception
On Wednesday 18th March, a Scottish Parliamentary Reception will be held to recognise the contribution the thriving credit union movement makes to the Scottish economy.
Hosted by Frank McAveety MSP and supported by the Co-operative Bank, the reception brings together MSPs from across the political spectrum and representatives from various agencies working alongside credit unions in Scotland.
Many representatives of the Scottish movement are also due to be in attendance in a fantastic opportunity to raise awareness within the Scottish Parliament and to demonstrate all the positives and potential that credit unions possess.
17 Mar 09 -
Latest Edition of Credit Union News Out Now
The latest edition of Credit Union News is now available to download. Features include a focus on just some of the great partnerships that our members are forming across the country to extend services to more people. ABCUL members featured include Pollok Credit Union, which has taken over the running of its local Post Office and Manchester Credit Union which has opened a new branch in offices owned by City South Manchester Housing Trust.
Also included in this edition is a feature on the cost of credit union loans compared to other lenders and news on national initiatives and local credit union achievements.
This year’s Annual Report has been published offering an overview of the last financial year.
The year saw the launch of the All-Party Parliamentary Group on Credit Unions, work towards important credit union legislative reform, the Credit Union Current Account really taking off and the development of strong codes of governance and credit union training courses to run alongside the Growth Fund support from the DWP.
For a refresher on all that has happened to the movement in another frantic year and to read Mary Henderson’s final President’s report you can download the report now.
Glasgow Council Promotes Cerdit Unions to Residents
Glasgow Council has this week launched a major advertising campaign to promote credit unions to its residents. The cucity.co.uk website provides information on credit unions across the city and the services they provide and is being promoted on TV and radio aswell as in local newspaper adverts and on buses.
With the strapline ‘ for loans and savings, the answer’s on your doorstep’ the campaign will continue throughout March.
Autumn Conference hosts help make life better for Mark and Gabriella
Donations from the joint hosts of the ABCUL Autumn Conference have helped 2 young children gain a better quality of life. The Police Credit Union and No 1 Copperpot Credit Union chose to donate the money they would usually have spent on gifts for delegates at the conference to Children Today, the official charity partner of Police Credit Union.
Along with this £1000 donation, a further £800 was raised through a collection at the conference and a raffle for which the credit unions and CUNA Mutual provided the main prizes. Children Today helps disabled children and young people live a life of greater freedom by providing grants for vital, life-changing equipment which are often not available through statutory funding. .
Kate Taverner, Bristol Branch Manager with Police Credit Union travelled to Mark Palmer’s school to present him with a specialised car seat to enable him to travel safely in the car, have easy access and see what’s going on around him. Mark, who has scoliosis, cerebral palsy and is partially sighted is pictured with Kate and his new seat.
Gabriella O’Reilly from Stockport also benefited from the donations and received a specialised car seat to make it easier for her to get in and out of the car. Gabriella has cerebral palsy which affects all her limbs. Caroline Domanski from No1 Copperpot Credit Union presented her with the car seat at the credit union’s head office in Cheadle.
ABCUL has welcomed new measures to tackle criminals illegally lending money which were announced this week by Consumer Affairs Minister Gareth Thomas.
A confidential national hotline to report illegal lenders is now up and running and gives consumers one single point of contact.
A new website has also been launched providing information on managing finances and how to borrow money safely. This provides information on alternative sources of credit, including credit unions.
The initiative was also welcomed by “money saving expert” Martin Lewis, who alerted the 3.2 million readers of his email bulletin to the new number and highlighted credit unions as an affordable alternative source of credit. The Stop Loan Sharks teams have successfully prosecuted more than 60 people with a further 90 prosecutions underway. This amounts to nearly 40 years of custodial sentences for illegal lending and associated crimes.
The teams have supported more than 7,000 victims of illegal money lenders. The first two pilot schemes were launched in September 2004 and then rolled out to every region of England, Wales and Scotland in 2007.Their work has meant around £14million has been saved for consumers who were locked in illegal deals with these money lenders.
Consumer Affairs Minister, Gareth Thomas, said: "Loan sharks fleece hard-earned cash from their victims causing great distress and anguish. "Calling this hotline gives victims the chance to talk in confidence. They get advice and support and the information provided helps the team to take action to stop illegal money lending. "The teams are having huge success in bringing these criminals to justice and are saving consumers significant amounts of money."
The national hotline - which is confidential - is: 0300 555 2222. And the website is: http://www.direct.gov.uk/stoploansharks Consumers can also text loan (space) shark (space) and your message to 60003.
05 Mar 09 -
The World Council of Credit Unions (WOCCU), announces online campaign at MatchSavings.org.
Although living in desperate poverty, people in the developing world often have no access to the savings facilities that would enable them to improve their situation without relying upon expensive credit. This campaign is an attempt to extend the availability of savings facilities to those most in need.
Via the website, MatchSavings.org, the general public has the opportunity to match the savings of those in the developing world and have a hand in the fight against global poverty. The first to benefit from the scheme are savers in the WOCCU credit unions of Mexico.
WOCCU Seeks Support for Victims of Australian Brushfires
The World Council of Credit Unions has established a fund to help victims of Australia's brushfires, many of whom are members of the country's credit unions. WOCCU is working in collaboration with Credit Union Foundation Australia (CUFA) to collect tax-deductable contributions that will be administered through the Red Cross Victorian Brushfire Appeal.
"The brushfires in Australia already have claimed close to 200 lives," said Brian Branch, WOCCU's executive vice president and chief operating officer. "In the true cooperative spirit, we're asking the global credit union movement to support Australian credit unions as they strive to serve their members during this crisis."
The brushfires have ravaged Victoria state, threatening several credit unions, their branches and many of their more than 250,000 members, according to reports. Police in Victoria believe the fire may have been the work of arsonists.
"We have a number of member organizations that have been directly impacted by the fires," said Karen Smith, spokesperson for Abacus Australian Mutuals, the Australian credit union trade organization and a WOCCU member. "At this stage we have no reports of staff lost, but many members have lost their homes and there is potential that some of them may have perished in the fires."
Much-needed cash contributions from credit unions and individuals worldwide will provide assistance to those whose lives have been devastated by the brushfires.
