Credit Unions

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Credit Unions

Post  MH on Fri 30 Jan 2009 - 2:19

There can be hardly anyone that thinks the High Street banks are not major culprits in the current economic crisis ... although government policies and lack of effective regulation might challenge them for that accolade.

Yes, the fault was not so much in retail banking as in their other activities, but the ordinary person in the street is going to be the one who suffers most. Banks are now looking for any excuse not to lend, so as soon as anyone gets into difficulty and defaults on a contract or gets into a level of debt that they cannot handle they are very likely to find themselves dumped. They'll find themselves unable to perform basic financial transactions, or only able to do so at exhorbitant rates.

So I'm pleased to see this story about a Credit Union offering these services in Llandudno:

Credit union launches debit card

This may be the first in Wales, but several other Credit Unions are doing the same:

Association of British Credit Unions

Particular thanks need to go to the Co-operative Bank, which has allowed their network to be used in this way. Its motive is a commitment to tackle financial exclusion.

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The demand for Credit Unions in Wales is rising dramatically, as this story from a couple of weeks ago shows:

Cash-hungry turn to credit groups - BBC, 9 Jan 2009

There is something that those of us who are better off can do to help the growth of this movement. Credit Unions are entirely owned by their members, and they can offer loans only on the basis of the strength of their members' holdings. Therefore it makes ethical sense to join a Credit Union even if you're not in financial trouble. You will get a dividend each year based on the surplus made, which will be the equivalent of interest.

This is how Leanne Wood put it a few months ago:


Support your local Credit Union

Yesterday was International Credit Union Day, so I visited the Treorci branch of the Dragonsavers Credit Union. Dragonsavers is a proper Welsh co-operative with five branches in Rhondda Cynon Taf. The staff were in good spirits, despite the doom and gloom in the economy, peoples’ money is safe here. I've been a member of Plaid Cymru's credit union for years, and I've joined Dragonsavers now too.

Members of the creidt union share their finances through a mutual bond of common ownership. Affordable loans (2% which can reduce down to 1.5%) are issued to members in amounts based on how much they have saved. Loans can come in handy to pay for Christmas or holidays. Credit unions are all regulated by the FSA and are very safe ways of looking after your money. The credit crunch will have no affect on them. They are protected from the reckless behaviour that has prevailed in the City of London, and aren’t involved in any risky investments. Credit unions operate an ethical loans policy so their risks are minimised. Now is a good time to consider joining a credit union. The One Wales government has already provided publicity and support for credit unions to expand - there was a further announcement yesterday that we are aiming to give areas of Wales access to a credit union. The more members a credit union has, the more they are able to provide a greater variety of services. They'll encourage you to save, but the minimum is £1 per week, and loans are available straight away.

Credit unions offer one small step towards a less competitive and more co-operative way of living. I am glad to celebrate them today.

17 Oct 2008
If we really think that the banks are acting in a contemptible way, even though they have been given billions in taxpayers money, then perhaps the Credit Union movement can become a real alternative. Affordable and accountable to its smallest members, not to a small number of shareholders.
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MH

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