Ethos Public Relations Manchester

Credit union sector set to transform in two years

by Ethos Admin

31 credit unions have signed up to a major new project that is set to transform the credit union sector over the next two years.

The ambitious Credit Union Expansion Project is being managed by the Association of British Credit Unions Ltd (ABCUL) and aims to attract up to a million more people into credit union membership. The Government has agreed to invest £35.6 million in the sector, which could save consumers up to £1 billion in loan interest repayments.

The first wave of 31 credit unions to join up has now been announced and includes many larger and fast growing credit unions. Over the next few months, many more credit unions will follow suit, allowing even more credit union members to benefit from the scheme. Credit unions are expected to serve an extra one million members within five years.

Mark Lyonette, Chief Executive of ABCUL, said: "We will be supporting credit unions to offer a much wider range of great value products to many more members from a broad range of income groups.

"Consumers will soon be able to benefit from the latest online technology to sign up to credit union services such as current accounts, budgeting accounts and Cash ISAs. A centralised hub will automate the delivery of products so that members can also access credit union services through secure connections to other networks. It is hoped that this will include the Post Office network.

"Credit unions will retain their local status and community focus, but work together where they can benefit from pooling knowledge and resources. This will give members the best of both worlds."

Because core tasks will be centralised, credit unions will benefit from economies of scale which they will be able to pass onto members through lower loan rates and better returns on savings. They will also be able to focus on providing the excellent service to members that they pride themselves on.

The sector will also research what people want from credit unions and work with employers and other community leaders to help more people access the services they need.

Mark Lyonette added: "This is a landmark project for credit unions and a once-in-a-lifetime opportunity which will help to place the credit union movement in Britain on a similar footing to leading credit union movements around the world."

Credit unions have welcomed the project and the benefits it will bring to their members.

Barry Duggan, Manager of Voyager Alliance Credit Union, which serves the passenger transport industry in England, Scotland and Wales, said: "We are really pleased to have been selected as one of the first wave of credit unions to join the project. Our credit union has always tried to stay at the forefront of new developments and new technologies – for example we were one of the first to introduce the Credit Union Current Account – and this scheme will help us to grow further and offer more and better services to our members. It is an exciting time for the credit union movement and we are looking forward to the opportunities and challenges ahead."

Vincent Thomas, Chair of London Plus Credit Union, said: "This inspirational project will help us to reduce costs and expand our product range as well as helping us to provide the fast and efficient services people expect these days. As well as being better able to compete with less ethical lenders, it will allow us to offer services to the whole community – not just those on lower incomes. We are delighted to be part of the project and we are looking forward to the improvements it will bring for members."

Posted at 7^th May 2013

Credit union's success means new premises for members

by Ethos Admin

A new head office for London Mutual Credit Union, jointly owned by 16,000 people, will be opened on Thursday 31st January by Deputy Leader of the Opposition, Rt. Hon. Harriet Harman MP.

London Mutual’s new premises in Peckham have been refurbished to provide an attractive and welcoming place for people to access great value financial services including a Cash ISA that pays 3% AER and an alternative ‘payday’ loan product that costs a fraction of the rate of commercial providers.

The credit union’s CUOK loan product offers short term loans over up to 3 months at just 26,8% APR.  The new service has drawn nearly 2,000 people away from high cost lenders which may charge up to 4,000 APR since its launch in February 2012. The former social services office was purchased from Southwark Council for £1 million.  Its 5,000 square feet houses the credit union branch on the ground floor with office space above.

London Mutual Credit Union’s Chief Executive Lucky Chandrasekera said: "It is testament to the hard work of our volunteers and staff and the support of our 16,000 members that we have been able to buy our own premises. We have always been at the heart of our community and I’m proud that we now have our own base in the centre of Peckham that is owned by our members. It will meet the needs of our expanding staff team as we expand access to many more people and will be a great advertisement to draw people away from the high cost lenders that plague our communities."

Harriet Harman MP said: "With payday loan shops blighting high streets, loan sharks stalking local estates and banks refusing to lend, there has never been a greater need for the excellent services of London Mutual Credit Union.  Building on the great work they’ve done over the years, I am delighted to be opening London Mutual Credit Union’s head office in Peckham."

Mark Lyonette, Chief Executive of the Association of British Credit Unions Ltd (ABCUL) said: "It is always great to see credit unions expanding and reaching more people.  When a credit union reaches the stage when it can buy its own premises, it is really a cause for celebration.  The new building is one that any organisation would be proud of, but it is extra special here because it is through thousands of local people joining together in a credit union that this has been made possible."

Lord Roy Kennedy of Southwark, who is a Vice Chair of the All Party Parliamentary Group on Credit Unions, will join the credit union at the opening, which will also be attended by the leaders of Southwark and Camden councils – Cllr Peter John and Cllr Sarah Hayward.

Posted at 30^th January 2013

Scam email warning for credit union members

by Ethos Admin

ABCUL (the Association of British Credit Unions Ltd) is warning credit union members not to respond to scam emails informing them they have won prizes in a national credit union lottery which does not exist.

Emails have been sent to some credit union members from www.culottery.co.uk, claiming that they have won prizes in a national credit union lottery. While many credit union members are able to take part in lotteries run to raise funds for their credit union, there is no national lottery run by or for the credit union sector nationally. Members replying to the emails are likely to be asked to provide bank details and risk identity fraud and theft if they respond to requests.

The website is illustrated with pictures of alleged winners of the lottery. These are actually doctored photos taken from the Connecticut State Lottery website. A number of credit unions are listed on the site, but none are associated with any such organisation. The website also has logos of Western Union and the Big Lottery; neither organisation has anything to do with the scheme.

ABCUL Chief Executive Mark Lyonette said: "It is a sad side effect of the increasing popularity of credit unions in Britain that scammers are targeting credit union members. I would advise anyone who receives an email saying they have won a prize or requesting any information to contact their credit union and not respond to the email."

Posted at 7^th January 2013

ABCUL welcomes £38 million Government investment in credit unions

by Ethos public relations

The Association of British Credit Unions Ltd (ABCUL) has welcomed today’s announcement that the Government will invest up to £38 million in credit unions over the next three years.

The money, which is in addition to £13 million invested in 2011/12, will be used to support credit unions to modernise and expand and help provide the infrastructure to enable them to do this. It follows the publication of a feasibility study commissioned by the Department for Work and Pensions, which provided recommendations for how credit unions could sustainably provide services for up to a million more people over the next five years.

The investment will be conditional upon the credit union industry meeting a number of agreed milestones for collaboration, modernisation and expansion. A more collaborative way of working can help credit unions to achieve economies of scale, provide a wider range of services to members and will enable developments such as access to credit union services through the Post Office to become a reality.

ABCUL Chief Executive Mark Lyonette said: “Credit unions in Britain already provide financial services to nearly a million people, many on low to moderate incomes. But we know that credit union sectors around the world, by working together behind the scenes and offering a broad range of products, reach many more people, including, but certainly not restricted to, those at the lower end of the income scale.

“So I very much welcome the recognition from Government that credit unions should be a mainstream option for saving and borrowing. This £38 million investment will help provide the infrastructure the sector needs and assist credit unions to develop services that will benefit everyone in the communities they serve, on a sustainable footing.”

Posted at 27^th June 2012

ABCUL welcomes research from Consumer Focus

by Ethos public relations

ABCUL – the Association of British Credit Unions – has welcomed research from Consumer Focus which shows that credit union access through the Post Office network would encourage many more people to use their services.

Research carried out for Credit Where Credit’s Due showed that almost half of consumers (46 per cent) said they would trust credit unions more if they were available at the Post Office, including more than half of those on low incomes. The findings mirror those published in a recent report prepared for the Department for Work and Pensions.

Research carried out for the DWP Credit Union Expansion Project Feasibility Study Report showed that there is a market and demand from low income consumers for modern banking products and services, and that the total market could be as high as seven million people.

ABCUL Chief Executive Mark Lyonette said: “We know that credit unions are popular with people for whom they are accessible and providing the right services. This valuable research adds to the evidence that building the structures to enable credit unions to link in with the Post Office network would encourage many more people to make use of their services. This has the potential to save low income consumers hundreds of millions pounds in interest payments and help many more people into a savings habit.”

The Consumer Focus report is available to download at: http://www.consumerfocus.org.uk/publications/credit-where-credits-due

To read other news from ABCUL click here

Posted at 24^th May 2012

Expansion Report for Credit Unions Welcomed

by Ethos public relations

The Association of British Credit Unions (ABCUL) has welcomed the publication of the report from the Project Steering Committee which has provided recommendations for how the DWP Credit Union Expansion Project can help credit unions to sustainably provide affordable financial services to up to a million more people within five years.

Research for the report found that a market exists amongst over 7 million people on lower incomes for locally provided banking, savings and loan services from trusted providers such as credit unions. More than 60% of over 4,500 people consulted said they would use credit union services if they were available to them.

In order for credit unions to modernise and expand, the report asserts that they need to demonstrate a commitment to change, work more closely together and make greater use of technology. This in turn, the report says, can improve loan making decisions, provide the online banking, jam jar accounts and automated savings and credit products that people want. This shared technology would also allow a link in with the Post Office which would greatly increase both accessibility and membership.

The report also recommends that a rise in the interest rate ceiling for credit union loans from two to three percent a month on the reducing balance should be considered by relevant Government departments and the credit union sector. This would be likely to only apply to the smaller loans for which credit unions are valued by lower income consumers, but which currently cost more to provide than they generate in income.

ABCUL Chief Executive Mark Lyonette said: “We welcome today’s report and its recognition of the greater role credit unions can play. We are pleased that the report identifies the need for credit unions to become more convenient to use, more efficient and attractive in order to serve millions more consumers. We also agree that increasing collaboration between credit unions is the best way to do this.

“We understand the thinking on interest rates and look forward to discussing the best way forward on this with the Government, our members and other stakeholders. Increasing costs for consumers should not be done without weighing up all the implications. But if, as the report suggests, hundreds of thousands of people will save hundreds of pounds in interest payments to high cost lenders because of the increased availability of credit union loans then it is something that the sector needs to seriously consider.”

Chair of the All Party Parliamentary Group on Credit Unions, Damian Hinds MP said:

"This is an exciting point in the development and growth of credit unions in Britain, with growing demand, the opportunities created by new legislation and the prospect of major infrastructure investment from government. To make best use of this, credit unions need to build unit scale and broaden the base of borrowers and savers. And if they are to be able to compete sustainably on smaller, short-term loans, then clearly the interest rate cap does need to be looked at afresh."

The report can be accessed here - http://www.dwp.gov.uk/docs/credit-union-feasibility-study-report.pdf

For more information about credit unions visit www.abcul.coop.

To read other news from ABCUL click here .

Posted at 10^th May 2012

Credit unions welcome Big Society Capital announcement

by Ethos public relations

ABCUL – the Association of British Credit Unions Limited – has welcomed today’s launch (4 April) of Big Society Capital by the Government and is pleased that organisations engaged in financial inclusion, such as credit unions, have been identified as potential beneficiaries of the new bank.

Mark Lyonette, Chief Executive of ABCUL says: “Credit unions are social enterprises which create both a social and financial return through providing affordable and appropriate financial services on an ethical, not-for-profit basis to those who are underserved or poorly served by the mainstream.

“Big Society Capital is therefore right to identify organisations such as credit unions as potential beneficiaries of increased social investment.”

As financial co-operatives, owned and controlled by their members, credit unions have no outside shareholders to pay and any profit they make stays in the community and is used to develop the credit union and provide a return to savers.

Credit unions offer a range of financial services including savings accounts with payroll deduction, the Credit Union Current Account, the Credit Union Prepaid Card and an affordable source of credit.

Mark Lyonette adds: “Although Big Society Capital has an ambitious programme which will be difficult to achieve, if it is able to meet its objectives it will have a significant, positive impact on the development of credit unions and other social enterprise sectors.”

For more information about credit unions visit www.abcul.coop.

To read other news from ABCUL click here.

Posted at 4^th April 2012

Credit unions welcome initial results of Government study

by Ethos public relations

The Association of British Credit Unions Limited (ABCUL) has welcomed a Government announcement of initial results from a feasibility study carried out last year to examine the options for the modernisation and expansion of credit unions.

The Department for Work and Pensions (DWP) study recommends that credit unions could increase access to basic financial services – banking, savings and credit – for up to a million people on lower incomes, and do this in a sustainable way.

ABCUL Chief Executive Mark Lyonette said: “I’m very pleased that the valuable work of credit unions and their potential to do much more has been recognised by the Government. I look forward to seeing more details that will explain how credit unions can be supported to increase their capacity.”

The announcement was contained in Social Justice Transforming Lives, published by the DWP, available here: http://dwp.gov.uk/docs/social-justice-transforming-lives.pdf.

To read other news from ABCUL click here.

Posted at 14^th March 2012

New powers allow credit unions to offer more services to many more people

by Ethos public relations

From 8 January 2012, people living in England, Scotland and Wales will begin to benefit from new credit union powers to deliver more services to more members and communities.

The new powers are the result of legal changes which give credit unions more flexibility to choose who can access their services. Credit unions will now be able to extend membership to more than one group of people, no matter where they live or work. For the first time, credit unions will be able to pay interest on deposits, instead of a dividend, and businesses and community organisations will be able to join a credit union and use the services it provides.

The changes will help individuals, businesses and other organisations access fair and affordable financial services in their communities and allow credit unions to provide a more effective alternative to high street banks on the one hand and high cost lenders and loan sharks on the other.

Up until now, credit unions have been hampered by outdated restrictions which meant all of their members had to have something in common – such as living in the same geographical area or working for the same employer – only individuals were able to become members, not organisations themselves, and credit unions could not pay interest on savings, only a retrospective dividend.

Credit unions no longer need to prove that all the eligible members have something in common, which will mean that credit union services can be extended to new groups much more easily. For instance, a credit union providing services to anyone living or working in Hull will now be able to serve all the employees of a company too, even if they do not live or work in Hull.

Credit unions will be able to begin to pay interest on savings, which will mean that people will be able to more easily compare the rates of return with other savings providers and it will help credit unions attract more savers.

The new rules also mean that organisations themselves can join a credit union (up to a maximum of 10% of the members) and use the financial services it provides. A community group, housing association or local employer, for example, may now be able to use a credit union to manage its money, with the added advantage that the money is kept in the community.

“These changes are a major breakthrough in the delivery of credit union services to communities around Britain,” said Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions.

“The new rules mean credit unions can now compete more effectively with banks and other lenders to provide fair and affordable financial services. Credit unions will be able to reach many more people, helping them to develop a savings habit, which can only be good for communities.”

As financial co-operatives, owned and controlled by their members, credit unions have no outside shareholders to pay and any profit they make stays in the community and is used to develop the credit union and provide a return to savers.

Credit unions offer a range of services including savings accounts with payroll deduction, the Credit Union Current Account, the Credit Union Prepaid Card and an affordable source of credit.

For more information about the new credit union powers, the services provided by credit unions and who can benefit visit www.abcul.coop.

To make contact with a local credit union visit www.findyourcreditunion.co.uk or call ABCUL on 0161 832 3694.

To read other news from ABCUL click here.

Posted at 3^rd January 2012

House of Commons Fair and Reception showcases credit unions

by Ethos public relations

Credit unions and partners showcased their work to MPs and policy makers at an event at the House of Commons on Wednesday 23 November. The Credit Union Fair and Reception was organised by the All Party Parliamentary Group on Credit Unions and sponsored by Santander.

Credit unions from across the country attended the event to show how they work with partners including housing providers, employers, schools and prisons to bring financial services, including convenient savings accounts, affordable credit and current accounts, to their members.

Alan Eagle from the Santander Foundation explained how the Foundation changed its policies a few years ago specifically to allow credit unions to benefit from its grants.

One of the Foundation’s most recent awards was to Clockwise Credit Union, one of the exhibitors at the event, allowing it to move into new, central premises in Leicester, helping to increase accessibility and grow membership.

Santander itself recently made a contribution to ABCUL’s back office project, enabling ABCUL – the Association of British Credit Unions, to develop tools to help credit unions more efficiently consider loan applications from members.

Chair of the All Party Parliamentary Group on Credit Unions, Damian Hinds MP, said: “Today’s event is testament to the excellent work credit unions are doing across the country with a wide range of partner organisations in order to bring ethical and affordable financial services to those that are most in need. Now that the Legislative Reform Order is in place, this type of partnership working will become much easier to expand to the great benefit of many across the country. It was particularly heartening to hear the cross-party support that credit unions enjoy in the Westminster Hall debate on Credit Unions and Financial Inclusion which took place alongside today’s Fair.”

Antony Macrow-Wood, ABCUL President, thanked attendees for their contribution to the legislative changes which were recently secured for the sector.

”Working together with successive Governments, parliamentarians, regulators and the rest of the co-operative sector, we have secured changes to legislation which will help credit unions build on the partnerships that are in evidence today, and enable many more people to benefit from credit union services.”

To read other news from ABCUL click here.

Posted at 25^th November 2011

Parliament approves credit union legislation changes

by Ethos public relations

Credit unions across Britain have welcomed news that Parliament has today (8th November) approved changes to legislation which will free up credit unions to reach many more members, including community groups and businesses.

A Legislative Reform Order (LRO), which makes changes to the Credit Unions Act 1979, has been approved by Parliament and new rules that enable credit unions to compete more effectively with banks and other lenders will be in place by January 2012.

Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions, said: “Credit unions in Britain are delighted that legislative reforms have been agreed by Parliament which free up the sector to compete on a more level playing field. ABCUL has campaigned long and hard for these changes so we’re happy that credit unions will be able to use the new powers from the New Year.”

Chair of the All Party Parliamentary Group on Credit Unions, Damian Hinds MP said: “I’m very pleased that the LRO has now been made. It opens up so many new possibilities for the sector to evolve, innovate and grow. The regulatory changes will help credit unions work more effectively with partners including housing providers and employers, and encourage more people to develop a savings habit.”

The credit union sector in Britain is small compared to other countries such as the United States and Canada, where over 40% of the populations belong to a credit union. Credit unions in Britain have, up to now, been hampered by outdated restrictions which limit who can join, what services they offer and which places they operate in.

The Order makes a number of changes, including allowing credit unions to provide services to community groups, attract investment from local businesses and extend services to new groups, including housing association tenants and employees. Credit unions will also be able to pay interest on savings, instead of a dividend, so people will more easily be able to compare rates.

Credit unions are financial co-operatives owned and controlled by their members. They have no outside shareholders to pay and any profit they make stays in the community and is used to develop the credit union and provide a return to savers.

For more information about ABCUL please visit www.abcul.coop.

To read other news from ABCUL click here.

Posted at 8^th November 2011

ABCUL calls for credit union alternative to NS&I at Post Offices

by Ethos public relations

Following the announcement that people will no longer be able to use Post Office branches to manage their National Savings and Investments (NS&I) savings products, ABCUL – the Association of British Credit Unions Ltd – has called for credit union services to be made available through the Post Office network.

ABCUL Chief Executive Mark Lyonette said: “Many people rely on their local Post Office for simple cash based savings products that they have valued for many years. The prospect of a big reduction in such products available through the Post Office network leaves a big gap which credit unions would be very well placed to fill.

“Credit unions offer simple, safe savings products to nearly a million people across Britain, but access in many areas to these services is limited. With the potential investment in the sector that the Government is currently considering, credit union savings and affordable loan products could be made available through the Post Office network.

“This could make local and mutual financial services accessible to millions more people and ensure that the Post Office remains a valued provider of the products people need.”

The Government announced in March 2011 – www.dwp.gov.uk/newsroom/press-releases/2011/mar-2011/dwp025-11.shtml – that it would invest up to £73 million in the expansion and modernisation of credit unions. A feasibility study for the programme has recently been submitted to the Project Steering Committee and a decision on the investment is expected by the end of 2011. More information is available here: www.dwp.gov.uk/other-specialists/the-growth-fund/latest-news.

To read other news from ABCUL click here.

Posted at 4^th November 2011

Credit Union Current Account gives customers full ATM access, even if banks won’t…

by Ethos public relations

Another one of the high street banks may have announced that it is restricting access to cash machines for nearly a million of its customers, but the Credit Union Current Account provides a fair and affordable alternative with full ATM access.

News that RBS is to stop its basic bank account holders getting their money out of other banks’ cash machines is the latest example of the limited services available to people on lower incomes from the high street banks. However, credit unions are stepping in to fill the gap with their own current account.

Credit Union Current Account customers can use over 40,000 free to access ATMs around the country, as well as getting cash back in stores. The Credit Union Current Account provides a VISA debit card, free same day access to credit union savings, and the opportunity to set up direct debits, standing orders, funds transfers and bill payments. Account holders can also have their salaries, pensions or benefits paid in directly, and can use their card for online purchases and Chip and PIN transactions in stores.

“When people say their bank is treating them unfairly, we point out that there could be a credit union alternative waiting for them locally,” says Abbie Shelton, Policy and Communications Manager at ABCUL – the Association of British Credit Unions. “The Credit Union Current Account provides the perfect answer for anyone who wants to access their money from as wide a network of ATMs as possible, as well as a wide range of other benefits which set it apart from high street banks’ basic accounts.”

The Credit Union Current Account is currently available from 25 credit unions around the UK, with more working towards offering it, and there are now over 31,000 credit union members with an account. Credit unions are financial co-operatives owned and controlled by their members. As they are managed locally and have no outside shareholders to pay, credit union members are happy to know that their money stays within their community.

To find your local credit union visit www.findyourcreditunion.co.uk. To find out which credit unions offer the Credit Union Current Account visit www.abcul.coop/about/productsservices/cuca.

To read other news from ABCUL click here.

Posted at 18^th August 2011

Gordon Brown calls on credit unions to ‘set the agenda’

by Ethos public relations

Gordon Brown has praised credit unions for their work to tackle inequality and called on them to set the agenda for the financial system based on the principles of fairness and responsibility.

The former Prime Minister was speaking at the World Credit Union Conference in Glasgow to an audience of 1,400 people from over 50 countries.

Gordon Brown said: “We have seen the biggest financial crisis of our history which was caused by the banks forgetting the basic values of fairness and responsibility which we all adhere to as a matter of course in our personal and professional lives. Credit unions, which have already seen fantastic growth in recent years, are faced with enormous opportunities because they are based on fundamental values of fairness and responsibility...

“We should build the financial system of the future based on principles of fairness and responsibility that have always been at the heart of the credit union movement.  So there is a big agenda ahead and, from Glasgow this week, I hope that you can set that agenda.”

Mr Brown also remarked on the growth of credit unions in Britain which now provide services to over 900,000 people, including 5,000 in his own constituency. He observed how this has been helped by the Growth Fund, introduced by the last Labour Government, which provided over 400,000 affordable loans to the value of £175 million, mainly through credit unions, and saved borrowers a similar amount in interest payments.

Association of British Credit Unions Limited (ABCUL) Chief Executive Mark Lyonette said: “I know that the credit union representatives around the world will have been very pleased to hear Gordon Brown express such respect and faith in both their work and their potential. Credit unions in Britain have benefitted greatly from Government investment in recent years and it is testament to the success of the Growth Fund and credit unions’ ability to change lives that the current Government is carrying out feasibility studies to examine the best way to carry forward this investment and continue growing the credit union sector.”

To read other news from ABCUL click here.

Posted at 25^th July 2011

Credit unions welcome changes to legislation

by Ethos public relations

ABCUL – the Association of British Credit Unions – has welcomed steps taken in Parliament this week which will see increased access to safe and ethical financial services in communities and workplaces across the country. A Legislative Reform Order, which will make changes to the Credit Unions Act 1979, was re-laid before Parliament on Tuesday (19 July).

The Order will make a number of changes to the Act including allowing credit unions to provide services to community groups, attract investment from local businesses and extend services to new groups, including housing association tenants and employees. Credit unions will also be able to pay interest on savings, instead of a dividend, making saving in a credit union more attractive.

Subject to scrutiny by Parliamentary Committees, the changes should be in place early in 2012.

Chief Executive of ABCUL Mark Lyonette said: “Credit unions around the country along with their partners have been eagerly awaiting these changes, and so I’m delighted that they are on track to be in force by next year.

“In campaigning for these changes we’ve taken a great deal of inspiration and received much assistance from our international colleagues. The timing of this announcement couldn’t be better as we will be able to share this news with them when they arrive in Glasgow this weekend (22nd July) for the World Credit Union Conference.”

To read other news from ABCUL click here.

Posted at 20^th July 2011

Collaboration is key to success for credit unions

by Ethos public relations

New research launched today, reveals that credit unions must work together and in partnership with a wide range of public and private sector organisations in order to fulfil their potential and reach all those who need their help.

Community finance for London - scaling up the credit union and social finance sector, is a major new strategic piece of research which examines how to develop affordable financial services in Greater London. The report was developed by Paul Jones of the Research Unit for Financial Inclusion at Liverpool John Moores University with Anna Ellison of Policis, and was funded by Santander. It is designed as a blueprint for the credit union and social finance sector and it demonstrates the important role of credit unions in enhancing the social and economic cohesion of communities.

Speaking at the launch in the Houses of Parliament, Paul Jones said: “The credit union sector needs to modernise and to achieve sufficient scale in order to offer affordable financial services to a wide range of households on low and modest incomes. However, it also needs to maintain the community finance ethos and vision that defines and differentiates it from the mainstream.

“The report explores the fit between the need for affordable financial services and the capacity of community finance in London. It investigates the nature of the challenges facing the sector in scaling up to meet demand and it reveals how credit unions are strengthening the social and economic cohesion of local neighbourhoods and communities.”

Rob Hailey, Senior Public Policy Manager at Santander UK plc, said: “We are delighted to support this important piece of research into the community finance sector. Though focused on London, many of its recommendations will be relevant for credit unions and others across the country. We hope it will contribute to the strengthening of the sector and ultimately to reducing financial exclusion.”

The report describes a vision of credit unions and social lenders working in partnership with central government, local authorities, social housing providers, money advice agencies and other locally-based organisations, to provide quality and competitive financial services at affordable rates whilst actively contributing to local social and economic development.

Credit union membership in London has grown by over 90 per cent since 2005. Now, everyone who lives or works in 27 out of the 33 London boroughs can join a credit union, and there are plans to expand into two more boroughs in the near future. However, despite this success, credit unions and the social finance sector in general, still lack the capacity and the reach to extend their services to the many more low and moderate income Londoners who could stand to benefit from access to affordable financial services.

Mark Lyonette, Chief Executive of ABCUL, said: “This timely report sets out a route map for the development of the credit union sector in Britain.

“Credit unions in this country are on the threshold of a major expansion, with new legislation in the coming months freeing up the sector to serve more people with a wider range of services. However, as this study shows, for credit unions to really fulfil their potential and reach all those in need of their help they must work together and with other agencies to achieve the scale and quality of services required.”

The study was funded by Santander as part of its work to support the community finance sector. The bank is also providing a £100,000 investment into a new credit assessment system for credit unions, being planned by the Association of British Credit Unions Ltd in partnership with Experian. The new system will play an important part in the development of credit union back office services in Britain.

To download the report go to: www.abcul.coop/media-and-research/research/london-community-finance-report.

To read other news from ABCUL click here.

Posted at 12^th July 2011

Credit union merger brings big benefits

by Ethos public relations

One of the biggest credit union mergers ever to take place in Britain sees the official launch of North Wales Credit Union today (11 July). Five successful credit unions have merged from a position of strength to offer more services to even more people.

Far from being forced into merger out of necessity, which is often the perception of mergers, these credit unions saw a huge opportunity to expand their services by working together.

“The formation of North Wales Credit Union is a landmark for the credit union sector in Britain,” said Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions. “The merger demonstrates the importance of credit unions working together to deliver a wider range of services and provide the consistently high quality of service necessary to attract a mix of members.”

Credit unions around the world have shown that, to be successful, they need to serve as broad a range of consumers as possible – not just those on the lowest incomes – and to achieve this they must collaborate.

The merger will enable the new credit union to deliver improved levels of service, with a wider network of offices and collection points, improved opening hours, higher savings limits and larger loans. In addition, it will be able to offer a broader range of services, such as insurance, budgeting and financial planning, as well as extending access to the Credit Union Current Account.

The new credit union has received the backing of the Welsh Government, as they believe it will enable many more people to access local financial services.

Speaking at the launch, Carl Sargeant AM, Minister for Local Government and Communities, said: “Tackling poverty and social exclusion where it persists in our communities is one of my key priorities over the next five years. Credit unions are ideally placed to help achieve this.

“To do so, credit unions need to be financially viable and sustainable in their own right. Greater collaboration between credit unions has clear advantages – to the credit unions themselves, their members and the wider communities. Where appropriate, merger between credit unions should be encouraged.

“The experience here in North Wales is a positive one and shows how a merger can work well.”

According to the Board of North Wales Credit Union (NWCU), the merger will create a strong, viable credit union which supports both existing and potential new members, providing them with a safe home for their savings.

Chair of NWCU John Killion said: “This exciting union not only builds on the strong foundations laid by all the merging credit unions, but heralds a new range of products and services for members.”

The Department for Work and Pensions at Westminster recently announced a £73 million fund to support suitable credit unions to expand and become financially sustainable – helping up to one million more people access clearer and fairer credit.

For more information about North Wales Credit Union visit www.northwalescu.co.uk. To find your local credit union visit www.findyourcreditunion.co.uk.

To read other news from ABCUL click here.

Posted at 11^th July 2011

Credit unions must collaborate to fulfil their potential

by Ethos public relations

Delegates and guests at the summer reception of the All Party Parliamentary Group on Credit Unions at Westminster Abbey heard how the credit union sector must collaborate to fulfil its potential in Britain.

Rt Hon Iain Duncan Smith MP, Secretary of State for Work and Pensions, and Deanna Oppenheimer, Vice-Chair Barclays Global Retail Bank and Chief Executive UK Retail Bank & Western Europe, joined representatives and supporters of the British credit union movement at the event organised by the Association of British Credit Unions (ABCUL) and supported by Barclays.

Credit unions around the world have shown that, to be successful, they need to serve a broad range of consumers and not just those on the lowest incomes. To achieve this, in many parts of the world credit unions collaborate to deliver a wider range of services and provide the consistently high quality of services necessary to attract a mix of members.

Thanks to funding announced by Barclays two years ago, ABCUL has been able to pilot a number of back office services between credit unions, to demonstrate a business case for greater collaboration in the sector.

Secretary of State for Work and Pensions Iain Duncan Smith said: "This country lacks a savings culture and it lacks the strong institutions that people on low incomes rely on for fair credit. We know that debt is a key driver of poverty and can make it difficult for people to hold down jobs or build stable homes. And for far too long doorstep lenders and dishonest operators have been plaguing the homes of vulnerable people, who often have no other way to get cash when they need it most.

"This is exactly why we need credit unions to be supported and strengthened. We’re making a £73 million fund available that will support suitable credit unions to expand and become financially sustainable, helping up to one million more people access clearer and fairer credit. People need to have a local, trusted organisation to turn to when they are in financial need, not high cost lenders or local loan sharks, so we are doing everything possible to make sure they have that opportunity."

Deanna Oppenheimer added: “Credit unions provide an important range of financial products and play a vital role in tackling financial exclusion in the UK. Barclays is committed to supporting credit unions to build scale and capacity to help the sector grow and reach more people access financial products.” Deanna Oppenheimer recently took up the position of Chair of the Project Steering Committee, which is leading a Department for Work and Pensions feasibility study on future funding for the credit union sector.

“Here in Britain we need to make sure our offer to potential members is accessible and attractive enough for a wider range of people to join,” explained ABCUL President Antony Macrow-Wood. “Collaboration is about more than using a common banking platform, although we do need that. It’s about a change of culture; it’s about looking for benefits in collaborating in all areas of operations.”

There are now over 130 members of the All Party Parliamentary Group (APPG) on Credit Unions. Damian Hinds MP, Chair of the Group, said: “We are using our collective voice to help ensure that credit unions get the legislative environment they need, so that the collaborative approach we are calling for can make a real difference to the millions of people on low and moderate incomes in Britain.”

The Barclays Community Finance Fund award winners were announced at the reception. The successful recipients were Clockwise Credit Union, London Mutual Credit Union, Women’s Enterprise, Employment and Training Unit (WEETU), London Rebuilding Society and South Tyneside Credit Union.

The reception marked part of the credit union sector’s contribution to the Co-operatives Fortnight celebrations which run from 25 June to 9 July.

To read Iain Duncan Smith’s speech in full, visit the DWP website: http://www.dwp.gov.uk/newsroom/ministers-speeches/2011/28-06-11.shtml.

To read other news from ABCUL click here.

Posted at 30^th June 2011

Credit unions welcome crackdown on unscrupulous loan brokers

by Ethos public relations

ABCUL – the Association of British Credit Unions – has welcomed the new measures announced by the Office of Fair Trading (OFT) to tackle the unscrupulous practices of some credit brokerage companies.

The action follows a super-complaint from Citizens Advice which highlighted the upfront fees some credit brokers charge customers for sourcing an unsecured loan – only for no loan to be arranged.

In response, the OFT is publishing new guidance on the standards it expects of credit brokers and of debt management companies, and it is also asking the Government to consider new legislation to address problems in the sub-prime unsecured credit brokerage market, including a possible ban on upfront fees.

Many credit unions have reported enquiries from people who paid fees between £50 and £70 or more to such brokers for the referral – even though no credit union has any relationship with such companies and these enquiries are treated no differently from applications from new members who got the credit union’s contact details from freely available sources.

Mark Lyonette, Chief Executive of ABCUL, said: “We’re very pleased to see the OFT taking action against some of the most unscrupulous practices in the credit brokerage industry.

“In recent years, there seems to have been an explosion in the number of businesses specifically targeting people in difficult financial circumstances and generating profits from outrageous fees and charges.

“Credit unions have been inundated with enquiries from people referred to them by credit brokerage companies, and are rightly angered that financially vulnerable people have been persuaded to pay such brokers a hefty fee for what is essentially no more than a note of the credit union’s contact details.

“Anyone looking for a local credit union can find the information freely available at www.findyourcreditunion.co.uk, or call ABCUL on 0161 832 3694.”

To read other news from ABCUL click here.

Posted at 1^st June 2011

Turn your ash into cash with help from your local credit union and WeQuit.co.uk

by Ethos public relations

Smokers who need that extra push to quit could do so with the help of their local credit union and www.WeQuit.co.uk.

According to the charity “No Smoking Day” (March 9th), 60% of smokers say they would like to stop, but lack the motivation to do so or think it will be too hard. When they do give up for a short while, the money they are saving is not obvious because it gets absorbed in ordinary household bills and quitters cannot see the full benefit of the money they have saved.

Quitter Val, 60, says: “I realised that by not smoking I was saving money – at 200 cigs a week that was £60 a week, £240 a month I wasn’t spending on smoking, but I didn’t seem to have any extra money because I was spending it without noticing. So now I send a regular payment to my credit union account every month and am saving up for a holiday next year. On the rare occasions I feel like a cigarette, I think of the fun I’ll have on my holiday instead!”

Other quitters will put the money in a jar each time they would have bought a pack of cigarettes, and take the cash they’ve accumulated down to their credit union, to keep the money “out of sight, out of mind” until they need it. One lady commented that the money she saved represented “guilt free shopping” trips with her friends.

Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions, said: "Credit unions offer a safe and convenient place to put the money you save from quitting smoking. You can save as much or as little as you like, which means the cash that used to go on cigarettes can go towards something special instead, such as a holiday or Christmas. Many credit unions offer payroll deduction too, so savings come out of your wages before you get them and you don't end up spending the money on something else."

Vishnee Sauntoo from the No Smoking Day charity added: “Quitting smoking is the single best thing you can do for your health and you can save loads of money too! If you are a 20-a-day smoker, you can save £2,300 in a year if you give up smoking. You could put that money towards a new kitchen, a family holiday or even save it through your local credit union.

“No Smoking Day – 9th March – is the ideal day to quit smoking with millions of others trying too. For more tips and advice go to our online hub www.WeQuit.co.uk which includes an online forum with thousands of quit buddies. They’ll also put you in touch with your local NHS stop smoking services through their ‘how to quit’ page.”

To find your local credit union visit: www.findyourcreditunion.co.uk or call ABCUL on 0161 832 3694.

To read other news from ABCUL click here.

Posted at 9^th March 2011