Ethos Public Relations Manchester

Avoid exorbitant overdraft charges with a Credit Union Current Account

by Ethos public relations

News that unauthorised current account overdrafts can result in exorbitant charges (up to 167% APR, on average) might have been a shock to many people – but not to those with a Credit Union Current Account.

The account – which is currently available from 25 credit unions around the UK, with more coming on stream all the time – offers a fair and affordable alternative and a greater degree of choice than currently provided by the high street banks. As there’s no overdraft facility, account holders are able to manage their money better – without the stress and uncertainty that many bank accounts bring.

“Credit unions aim to help their current account customers by not letting them go overdrawn. To achieve this, they deliberately do not offer overdrafts, which can cause so much misery if people unexpectedly run up huge charges,” says James Moran, Banking Services Manager at ABCUL – the Association of British Credit Unions.

“If there are not enough funds in your account to pay direct debits or standing orders, there is generally a small charge or fee when these are returned.

“Credit unions work with their members to help them manage their money rather than slapping huge charges on them when they go into the red.”

James adds that the Credit Union Current Account provides a fair and affordable alternative to the traditional bank account.

“When people say there’s not enough choice and the banks are treating them unfairly, more often than not there’s a credit union solution waiting for them locally. The Credit Union Current Account provides the perfect answer for anyone wishing to avoid overdraft charges.”

Credit unions are financial co-operatives owned and controlled by their members. To find a credit union near you visit www.abcul.coop.

Posted at 19^th July 2010

Minister sets out Government support for credit unions and mutuals

by Ethos public relations

Financial Secretary to the Treasury, Mark Hoban MP, yesterday confirmed the new Coalition Government’s commitment to credit unions and mutuals at a House of Commons reception organised by the All-Party Parliamentary Group on Credit Unions.

Mark Hoban explained the lessons that are being learnt from the recent past in the financial sector and set out the Government’s plans for supporting credit unions as part of its policy commitment to foster diversity in financial services, promote mutuals and create a more competitive banking industry.

“We are determined to help credit unions grow and expand into the future. But growth and expansion must be established on the basis of credibility – credibility that can only come as credit unions build sustainability. And it is in the interests of credit unions, the members of credit unions and the movement as a whole that sustainability is built.

“This Government believes that strong credit unions will greatly enrich British society, so it is in our interest to do whatever we can to help the credit union movement to prosper.”

Damian Hinds MP, the new chair of the All-Party Parliamentary Group on Credit Unions, said: “This is set to be an exciting time for the credit union movement with the new opportunities afforded by the Legislative Reform Order, partnership potential with the Post Office, and of course a much sharpened focus on debt as an issue at all levels. I am delighted the All-Party Group on Credit Unions has now been re-formed with very broad support, and I am sure we can play a helpful role in that agenda.”

Reverend Antony Macrow-Wood, President of ABCUL – the Association of British Credit Unions, said: “It is good news that the Government will support the valuable work of credit unions and we hope that the new legislation, which will make such a difference to the sector, will complete its passage through Parliament as quickly as possible.

“We look forward to working with the Minister, the new Chair of the APPG and its members, in the coming months and years, to create a credit union sector to be proud of.

“New legislation will help credit unions reach out to many more people. The work we are doing to develop a back office and extend our services through the Post Office will also make credit unions more accessible and convenient and we need to work together to achieve this.”

The reception was organised in conjunction with ABCUL – the Association of British Credit Unions – and supported by The Co-operative Bank, which has a long history of backing credit unions through preferential banking services and research. It was attended by credit union staff and volunteers, supportive MPs and Peers, and relevant stakeholders from across the consumer affairs, financial inclusion and financial services industries.

Other speakers included Debbie Wheeler, Head of Charity and Social Enterprise Banking at The Co-operative Bank. Commenting at the event, Debbie Wheeler said: “As a long standing supporter of the credit union movement, we are pleased that the new Government has made this commitment to develop the sector.

“Credit unions can play an important role in a diverse financial services market and, in particular, in helping to tackle financial exclusion.”

The reception also marked part of the credit union sector’s contribution to the Co operatives Fortnight celebrations which run from 19 June to 3 July.

Posted at 1^st July 2010

Credit union disappointment at Government decision to scrap Saving Gateway

by Ethos public relations

ABCUL - the Association of British Credit Unions – has expressed its disappointment at the decision announced by the Government in today’s Emergency Budget to scrap Saving Gateway.

Speaking on behalf of the sector, Mark Lyonette, Chief Executive of ABCUL, said: “Over 100 credit unions had already put in place plans so that they could start delivering the new savings product next month. They were looking forward to helping more low income consumers get the saving habit. It is disappointing that the Government should cancel this at the last minute.

“Credit unions will of course continue to work to encourage savings in their communities. They do this by providing easy ways to save and crucially by reducing the very high cost of credit for those on low incomes. This means people have more money in their pocket to start a savings habit. In the last four years credit unions have already helped nearly a quarter of a million people to save hundreds of pounds each in interest payments on small loans. We hope that the Government will continue to support credit unions in reducing the debt burden for low income consumers as a valuable way to encourage saving.”

Posted at 22^nd June 2010

Credit union response to publication of OFT review of high cost credit

by Ethos public relations

ABCUL – the Association of British Credit Unions – has responded to the publication today (15 June) of the Office of Fair Trading’s final report on its review of high cost credit.

Speaking on behalf of the sector, Mark Lyonette, Chief Executive of ABCUL, said: “Despite strong growth in recent years, many more credit unions visible and accessible on the high street and new products such as the Credit Union Current Account, we can’t fail to agree with the OFT’s analysis that credit unions’ effectiveness and ability to compete with high cost lenders is limited by their scale, which prevents them from enjoying economies of scale and offering extended opening hours.

“New legislation due later this year will allow credit unions to expand on partnerships with housing providers and employers and allow many more social housing tenants and employees to benefit from credit union membership.

“But to really have an impact on high cost credit, credit unions need to be visible and accessible in every community. That's why our work with Post Office Ltd to allow people to join their local credit union and carry out transactions in any Post Office is so important.

“Support for the sector to collaborate and work together behind the scenes would be an extremely cost effective way to make access to affordable credit and safe savings available to millions more people. Millions of pounds could be kept in low income communities instead of leaking out to high cost credit providers such as doorstep lenders and rent to buy stores.”

The OFT report can be downloaded by clicking here.

Posted at 15^th June 2010

The Connect programme, supported by Barclays, helps strengthen bonds between credit unions and Citizens Advice

by Ethos public relations

As part of an ongoing programme of support for credit unions and Citizens Advice, the latest initiative from the Connect programme, supported by Barclays, is the launch of a new Small Bursaries Scheme.

The scheme, which is being co-ordinated by ABCUL – the Association of British Credit Unions, is designed to assist in the creation of new partnerships between credit unions and Citizens Advice Bureaux (CAB) and to help those credit unions and bureaux that have not previously benefited from Connect programme support.

Fifteen partnerships have been awarded funding for a diverse range of initiatives including:
•    visits to local businesses, supported by a local borough council business engagement team, promoting the services of credit unions and CAB
•    the provision of equipment and renovation costs for new co run clinics and outreach services
•    training days for staff and volunteers of credit unions and CAB
•    the co-establishment of a local Financial Inclusion Forum
•    a programme of ‘train the trainer’ workshops for staff from both organisations to deliver joint community training sessions.

The partnerships cover the length and breadth of England and Wales, from the North East of England and as far south as Somerset, and help to demonstrate the close working relationships between credit unions and Citizens Advice across the country.

The key to any successful partnership is to develop sustainable working relationships, explains Anne Selka, Project Manager at ABCUL. “The response has been fantastic with over 80 organisations involved in bursary applications. The standard of application was extremely high with some very innovative and varied proposals for developing and augmenting sustainable CAB / credit union relationships.”

Elizabeth Adimeji, Head of National Partnership Development at Citizens Advice, says: "Many of the people on low incomes who turn to their local CAB for help with debt problems or because they are worried about how to pay basic household bills could benefit enormously from access to a credit union, allowing them to boost their money management skills and get help with low cost credit and savings. That's why it makes perfect sense for us to work together wherever we can. This new scheme will help us do that better in more areas."

Rachel Herbinson, Barclays Community Investment Manager, adds: “Since 2005, we've given over £3m to the UK community finance sector, as part of our financial inclusion strategy. We are proud of the role we are playing in helping to promote the sustainability and reach of the sector. Programmes like Connect enable us to support the valuable work and partnerships between credit unions and local CABs and we are delighted so many will benefit from the Small Bursaries Scheme.”

Posted at 3^rd June 2010

Credit unions welcome Post Office link up proposals

by Ethos public relations

ABCUL – the Association of British Credit Unions – has welcomed today’s response to the consultation on the future of financial services in the Post Office  which sees the Post Office network as a natural distribution partner for credit union services.

Responding to the news on behalf of the credit union sector, Mark Lyonette, Chief Executive of ABCUL, said: “Credit unions are ideally placed to offer fair banking and affordable credit to people on low and modest incomes and a link up with the Post Office will bring these services within the grasp of many more people.”

The consultation response, published today by the Department for Business, Innovation and Skills proposes using a new community levy to be funded by retail banks to support a link between credit unions and Post Offices, allowing people to access credit union loans, current accounts and savings accounts throughout the Post Office’s 11,500 branches.

“Opening up the Post Office network to credit union services,” says Mark Lyonette, “will help to deliver a step change in the scale of credit unions in Britain, boosting access to their services for millions more people and raising awareness of credit unions as an ethical and sustainable banking alternative.”

In addition to savings accounts and affordable loans, credit unions offer a wide range of financial services including Child Trust Funds, Cash ISAs and Current Accounts which, thanks to today’s announcement, could soon be available through the Post Office network.

According to ABCUL, the Post Office link up would allow Post Office customers to join a credit union and existing credit union members to get easier access to their accounts, especially when away from home. Staff at a Post Office would be able to carry out transactions in real time, check account details and balances, pay out savings and give instant, pre-approved loans that are affordable and convenient.

Andy Burrows, postal expert at Consumer Focus said: “The emphasis on providing access to credit unions through the post office network, funded by levy on banks, would give people another trusted way to manage their money and get access to more affordable credit.”

Mark Lyonette of ABCUL concludes: “Credit unions across the country are keen to offer their services to many more people and the Post Office link up will help them achieve this.

“Today’s response is key to kick starting this exciting initiative which will contribute towards reducing financial exclusion and bringing fair and affordable banking services to many more communities – a real mutual and local alternative. We look forward to working with the next Government to bring these exciting plans to fruition.”

Posted at 29^th March 2010

Credit union reform a step closer

by Ethos public relations

A historic change in legislation, which will see credit unions freed up to increase membership and fulfil their potential as providers of financial services, has come a step closer.

ABCUL – the Association of British Credit Unions – has welcomed the laying of a Legislative Reform Order (LRO) in Parliament, which means that long-awaited legal reforms for credit unions could be in place within months.

ABCUL Chief Executive Mark Lyonette says: “It’s great that we finally have a timeframe for the LRO to get through Parliament. This has been eagerly anticipated by the credit union sector for a long time and it’s good to know that we’re nearly there.

“All the political parties are supportive of the reforms proposed and this means we are likely to see the changes come into effect by 1 August this year – which is really exciting for credit unions.”

ABCUL has also welcomed the passing by Parliament of the Co-operative and Community Benefit Society and Credit Union Bill, which will help modernise legislation covering all co-operative businesses.

Mark Lyonette adds: “Modernised legislation for credit unions, and other organisations operating the mutual model, will mean fewer obstacles to carrying out our business, allowing us to focus on our key objective of serving our members.”

Both the LRO and the Bill have received strong cross party support in the House of Commons and the House of Lords.

Economic Secretary to the Treasury, Ian Pearson MP, speaking during an earlier debate on the Bill said: “We must do all we can to ensure that credit unions thrive and play an even more important role in the economy. I agree with my right hon. Friend’s comment that credit unions are the ‘decent alternative’.”

In a House of Lords debate on the Bill, Financial Services Secretary Lord Myners said: “The Government applaud the role that credit unions play in encouraging a savings ethos among their members, as well as providing them with necessary capital when needed.”

Speaking during the third reading of the Bill, Mark Hoban MP, Shadow Financial Secretary to the Treasury, said: “All of us across the House recognise the importance of credit unions in providing an alternative to the banking system.

“A number of moves have been made in recent years to modernise the legislative framework for credit unions, to ensure that they are capable of being sustainable and viable, and can provide a proper alternative to banks.

“I meet regularly with the Association of British Credit Unions Limited to talk about such issues and I know how keen credit unions are to see this Bill put in place and for the legislative framework to be modernised.”

Liberal Democrat MP Norman Lamb said: “I have also seen credit unions developing in my area, offering people who are often on low incomes a vital alternative facility to that offered by doorstep lenders who charge high interest rates. We need to do everything that we can to encourage and promote credit unions.”

Changes due when the LRO comes into forces will enable credit unions to provide services to community groups, social enterprises and companies. They will also be able to bring new groups into membership and offer a fixed rated on interest (instead of a dividend) on members’ savings.

Posted at 17^th March 2010

Credit unions best hope to tackle financial exclusion

by Ethos public relations

Support for the supply of affordable credit through credit unions both now and after the election was discussed at a major conference last week.  According to the Association of British Credit Unions Limited (ABCUL), if there is to be a real impact on financial exclusion, Government needs to act to create a step change in the scale and effectiveness of the sector.

Speaking about the importance of financial inclusion and the distinct value of credit unions, ABCUL Chief Executive Mark Lyonette told the Northern Money Conference in Liverpool that Government needs to make a one off investment in back office services for credit unions. This will bring economies of scale to the sector and allow more credit unions to offer a wider range of services to new and existing members.

“Crucially this will also allow credit union services to be made available through the Post Office network,” he said.

“Only credit unions can meet the financial needs of lower income consumers and extending the banks’ services through Post Offices won’t improve the situation.

“Post Office customers not serviced by banks can pay upwards of 200 per cent in interest for loans, which credit unions provide for a tenth of the cost.

Speaking at the conference, Helen Goodman MP, Minister for Financial Inclusion at the Department for Work and Pensions, said: “We are committed to ensuring people on low incomes have access to the financial services and advice many of us take for granted.

“The government has invested almost £100m through the growth fund for credit unions and has now helped more than 240,000 people.

"The credit union movement plays a vital role in helping people get through difficult financial circumstances.

“It is changing the lives of those who were in debt by helping them to build and rely on their own savings rather than borrowing from unscrupulous lenders.”

Mark Hoban MP, Shadow Financial Secretary to the Treasury, told delegates: “Financial inclusion will matter to the next government. Unless we take financial inclusion seriously, families won't be able to put their finances back on the right track.

“We need to give people the support, including advice and guidance and strengthening credit unions, to enable them to make the best choices for their families.”

Mark Lyonette added: “The Government also needs to hold banks to account on their previous commitments to support the expansion of affordable credit.”

ABCUL believes an effective way to ensure this is for bank staff to volunteer on the Boards of credit unions, using their skills and experience to help the sector develop to its full potential.

Mark Lyonette concluded: “We are looking forward to the reform of credit union legislation later this year which will help modernise the whole credit union sector and remove many of the barriers which currently stop us delivering our services more widely."

The Northern Money Conference was organised by the Association of British Credit Unions (ABCUL), the Research Unit for Financial Inclusion at Liverpool John Moores University and Citizens Advice, and was supported by The Co-operative Bank.

Posted at 9^th March 2010

Finance For All - conference addresses changing financial inclusion agenda

by Ethos public relations

The Northern Money Conference is taking place on 1 March with an even broader programme tackling financial exclusion faced by people on low and moderate incomes.

This year, the conference is broadening its focus from the financial inclusion agenda alone to highlight the financial problems currently facing those on both low and moderate incomes, as a result of the credit crunch which has significantly changed the landscape of financial services.

The conference is jointly organised by the Association of British Credit Unions Limited (ABCUL), the Research Unit for Financial Inclusion at Liverpool John Moores University and Citizens Advice, and is supported by The Co-operative Bank.

As part of its co-operative heritage, The Co-operative Bank has a commitment to tackling financial inclusion and its support for credit unions is one of a number of initiatives in which it is involved.

Mark Lyonette, Chief Executive of ABCUL, said: "No conference at this time could ignore the changing political environment and its potential impact on organisations and services endeavouring to serve low-income communities.

"This partnership between a bank, the credit union movement, the advice sector and a university reflects the approach taken by the conference: promoting financial inclusion depends on Government and the private, voluntary and third sector acting collaboratively."

The conference is for all organisations and agencies with an interest in and commitment to tackling financial exclusion in Britain. These include regional and municipal authorities, government agencies, banks, credit unions and other financial institutions, money advice agencies, social landlords, community organisations and associations, churches, agencies working with young people and families.

Confirmed speakers this year include: Helen Goodman MP, Parliamentary Under-Secretary of State at the Department of Work and Pensions; Mark Hoban MP, Shadow Financial Secretary to Treasury; Graham Leftwich, Business Leader Corporate Communications, Co-operative Financial Services; Paul A Jones, Research Unit for Financial Inclusion, Liverpool John Moores University and Mark Lyonette of ABCUL.

The conference takes place at the Contemporary Urban Centre (CUC), Liverpool.

Places are limited so for more information about the conference and how to book your place please visit www.abculelearning.coop and select ?Events and Conferences?.

If you have any questions regarding the event please contact ABCUL Conferences either by email at conferences@abcul.org or call 0161 832 3694.

Posted at 11^th February 2010

Financial advice agencies Connect

by Ethos public relations

North Yorkshire Credit Union and North Yorkshire Advice came together to
encourage local branches of the Citizens Advice Bureaux across the county to work in partnership with the credit union. The new partnership approach is designed to provide a more holistic financial solution and greater stability for financially vulnerable people.

This event was hosted by The Connect 2 Project, funded by Barclays and in partnership with The Association of British Credit Unions (ABCUL) and Citizens Advice.

North Yorkshire Credit Union has already worked very successfully with its local CAB and the event showed this clearly, and helped to demonstrate the valuable difference that working together is making to those struggling to cope with their finances.

Anne Selka, Project Manager at ABCUL, said: ?This was the first workshop for Connect 2 and I am delighted to say that the CABx gave very positive feedback. It was clear there was a lot both organisations had in common and it makes sense to work closer together.?

Citizens Advice and ABCUL want to encourage the development of further relationships between CABx and credit unions across the UK so that financial and debt advice can be provided alongside credit union services and cross-referrals can be facilitated where applicable.

Elizabeth Ladimeji, Head of National Partnership Development at Citizens Advice, said: ?Citizens Advice is delighted to be working with ABCUL on this project - a partnership linking bureaux and credit unions in providing a pathway to financial inclusion and stability for vulnerable customers.?

As the major funder of the Connect Project, Barclays is keen to support this type of collaborative working.

Community Investment Manager at Barclays, Marie Morris, said: ?Barclays recognise that by supporting and partnering with community finance organisations such as credit unions we can deliver more fair and affordable alternatives to those on low income or benefits.?

To find out more about The Connect Project and to get involved, please contact Project Manager, Anne Selka on 07899 951 682 or email anne.selka@abcul.org.

Posted at 8^th November 2009

Credit Unions help savers this Christmas

by Ethos public relations

Three years after the collapse of Farepak, in which more than 150,000 customers lost their money, more and more people are choosing credit unions to help them save safely for Christmas.

Over the two years to 2008, The Association of British Credit Unions (ABCUL), saw a 15 per cent increase in savings in their member credit unions.

And now more and more individual credit unions are offering Christmas savings accounts which provide a safe and valuable way to save, helping people to manage their money ahead of the most expensive time of the year. 71% of credit unions said they offered a Christmas Savings Account in a recent survey, with a further 18% planning to offer the account in the future.

Farepak customers lost an average of ?400 each when the Swindon firm ceased trading in October 2006, with some families losing closer to ?2,000, just two months before Christmas.

Mark Lyonette, Chief Executive of ABCUL ? the Association of British Credit Unions ? (pictured) said: "Credit unions, as community-owned and controlled organisations, offer local people a well-trusted financial solution.

"By making regular deposits into a Christmas savings account, members can relax knowing that they haven?t had to run up huge credit card bills or taken out an expensive personal loan to pay for Christmas. And members can spend the cash they?ve saved anywhere they want as they?re not tied to using vouchers in only certain stores."

One credit union with a popular Christmas savings account is Scotwest Credit Union in Glasgow which introduced its account following the Farepak collapse.

Fiona Greer from Port Glasgow, works in the Housing Benefits Office for Inverclyde Council, and has been a member of Scotwest Credit Union since 2003. This is the third year Fiona has saved using a Christmas Savings Account with Scotwest, having switched to the credit union from another Christmas savings company.

She hopes this year to have saved around ?600, which will allow her to have an enjoyable Christmas and buy presents for all her friends and family. The account runs until the middle of November 2009 and account holders, like Fiona, will receive a dividend on the savings they have accrued over the year.

She said: "Scotwest?s Christmas Savings Account is a fabulous idea. It allows me to put away small amounts of money each month throughout the year and I don?t miss it as it comes straight off my salary and goes into my savings. It also allows me to save my money securely, providing me with the money to ensure I can have an enjoyable Christmas. I would really encourage others to follow suit, especially if they have a tendency to spend money they don?t have during the festive period!"

Rod Ashley, Chief Executive of Scotwest Credit Union said: "Year in year out thousands of people succumb to the pressures of consumer spending and run up huge amounts of debts throughout the festive season. The Christmas Savings Account prevents people from getting into financial trouble and ensures they have a stress free and enjoyable festive period."

To find out how your local credit union can help you save for Christmas, visit the website at www.abcul.coop or call ABCUL on 0161 832 3694.

Posted at 29^th October 2009

Your money, your choice, your credit union

by Ethos public relations

With credit union membership in the UK up by 10 per cent, International Credit Union Day on Thursday 15 October, will celebrate the success of credit unions around the globe.

186 million people worldwide choose credit unions and latest figures from the Association of British Credit Unions (ABCUL) in June 2009, show that the 325 credit unions belonging to ABCUL were managing around £450million of members? savings on behalf of over 550,000 people, with approximately £370 million out on loan.

International Credit Union Day, this year themed 'Your Money, Your Choice, Your Credit Union', will not only help to raise awareness of the invaluable work credit unions are doing, but it will also give members the opportunity to get more involved in the credit union movement as a whole.

According to Mark Lyonette, Chief Executive of ABCUL, there has never been a better time to celebrate the success of the credit union sector.

"Credit unions, as financial co-operatives and community-owned and controlled organisations, have proved their durability during the economic downturn as they offer local people a well-trusted financial solution," he said.

"The recent economic crisis has highlighted the benefits of mutual ownership and credit unions have been successful in this country, and all over the world, because of the way they look after their owners - the members.

"If people want to enjoy the benefits of owning their own finance provider they should join their local credit union - not only will they be able to benefit from a range of affordable products and services, but they will also know their money is in safe hands - their own."

There are approximately 186 million members of 54,000 credit unions in 97 countries worldwide whose members collectively own assets of US$1.2 trillion.

To find out more about credit unions in Britain visit www.abcul.coop.

Posted at 12^th October 2009

'Financial Meltdown - who can you trust?' - The Conservative Party Conference

by Ethos public relations

Mark Hoban MP, Shadow Financial Secretary to the Treasury, addressed a fringe meeting at the Conservative Party Conference in Manchester this week, which examined the Government's attitude towards mutuals following the recession.

At the meeting, which was organised by Mutuo, the Association of British Credit Unions (ABCUL), the Building Societies Association, the Association of Mutual Insurers, the Association of Friendly Societies, The Co-operative Financial Services and Which?, addressed the fact that the mutual sector, whilst not immune from the economic downturn, has proved its durability during the downturn.

As the UK begins to emerge from recession, and reputations of many great businesses and their leaders have been damaged, the mutual sector has been relatively unscathed, and its long-termism and clear business purpose has insulated the sector from the worst of the economic storm.

Commenting, Mark Hoban said: "In the past, the Conservative Party has perhaps not talked enough publicly about their support for the mutual sector but now there is a renewed interest in mutual organisations across the House of Commons."

Mark Lyonette, Chief Executive of ABCUL, explained how credit unions, as community-owned and controlled organisations, offering local people a well-trusted financial solution, are playing a vital role in the economic downturn.

"Credit union services are in demand more than ever, both from people looking for affordable places to borrow and from people looking for a safe home for their money," he said.

"Now that credit unions can offer a current account, many more people are leaving banks behind and having all of their wages or benefits paid into their credit union.

"Large numbers of credit unions have reported big increases in deposits - sometimes with members crossing the road clutching four figure sums they've just withdrawn from their bank.

"People are valuing local, mutual organisations that haven't been embroiled in the international economic crisis."

Mark Hoban added: "I have always thought that credit unions play an important role in providing an alternative to the banks and doorstep lenders, and they now have a tremendous opportunity to seize the moment and become the real alternative to the High Street banks."

Posted at 8^th October 2009

"Financial Meltdown ? who can you trust?" - The Labour Party Conference

by Ethos public relations

Sarah McCarthy-Fry MP, Exchequer Secretary to the Treasury, addressed a fringe meeting at the Labour Party Conference in Brighton, which examined the Government?s attitude towards mutuals following the recession.

At the meeting, organised by Mutuo, the Association of British Credit Unions (ABCUL); the Building Societies Association; the Association of Mutual Insurers; the Association of Friendly Societies; the Co-operative Financial Services and Which?, addressed the fact that the mutual sector, whilst not immune from the downturn, has proved its durability in the economic downturn.

As the UK begins to emerge from recession, and reputations of many great businesses and their leaders have been damaged, the mutual sector has been relatively unscathed, and its long-termism and clear business purpose has insulated the sector from the worst of the economic storm.

Mark Lyonette, Chief Executive of ABCUL, explained how credit unions, as community-owned and controlled organisations, offering local people a well-trusted financial solution, are playing a vital role in the economic downturn.

?Credit union services are in demand more than ever, both from people looking for affordable places to borrow and from people looking for a safe home for their money,? he said.

?Now that credit unions can offer a current account, many more people are leaving banks behind and having all of their wages or benefits paid into their credit union.

?Large numbers of credit unions have reported big increases in deposits ? sometimes with members crossing the road clutching four figure sums they?ve just withdrawn from their bank.

?People are valuing local, mutual organisations that haven?t been embroiled in the international economic crisis.?

Posted at 29^th September 2009

Credit unions can help parents set up and manage Child Trust Fund accounts

by Ethos public relations

Following the official launch of the Child Trust Fund Age Seven Payments at 11 Downing Street (9 September 2009), the Association of British Credit Unions (ABCUL) is advising families that credit unions can offer assistance in setting up and managing Child Trust Fund (CTF) accounts.

Further to the event in which Chancellor of the Exchequer, Alistair Darling, and Exchequer Secretary, Sarah McCarthy-Fry, presented the new Child Trust Fund Age Seven Payments to a group of schoolchildren, ABCUL is advising families that increasing numbers of credit unions throughout Britain can offer cash based CTF accounts along with other safe savings accounts for all ages and many purposes.

A number of credit unions can assist families with setting up initial CTF accounts, offer advice about the Child Trust Fund Age Seven Payments and advise families on how to manage their CTF accounts on an on-going basis.

Any child born on or after 1 September 2002, living in the UK and registered for Child Benefit, receives a Child Trust Fund voucher from HM Revenue & Customs for at least ?250. From this month onwards, children who turn seven will get a ?250 birthday boost to their CTF account. The extra money will benefit 700,000 children per year, with children in lower income families also receiving a further ?250.

Mark Lyonette, Chief Executive of ABCUL, said: ?By using your initial voucher from the Government, the additional age seven payment and by topping up the account when you can, and encouraging relatives to do the same, you could build up a fund that will give your child a helping hand when it comes to driving lessons, for example, their first car, a university education or even help with a deposit on a house.

?The cash savings Child Trust Fund offered by credit unions is a long term risk free deposit account, which can be topped up on a regular basis by parents, families and friends ? up to ?1,200 per year tax-free. Then, when your child turns 18, they receive the money deposited plus any additional interest or dividend payments.

?And because credit unions are mutuals, which only exist to meet the needs of their members, they provide convenient and ethical ways to save. Any money a credit union makes after paying its expenses is shared out among members with no outside shareholders taking any of the profits."

There are 29 credit unions providing CTF?s across the country. To find out if there is a credit union you can join which offers a Child Trust Fund Account, visit? www.abcul.coop/page/childtrustfunds.cfm or call ABCUL on 0161 832 3694.

Posted at 10^th September 2009

Credit Unions can help parents struggling to afford ?Back to School? costs

by Ethos public relations

In light of a recent report by Save the Children and Family Action, which revealed more than half of UK parents can?t afford all the ?Back to School? costs, the Association of British Credit Unions (ABCUL) is advising families that credit unions can offer assistance.

In the first return to school since the recession officially hit, the report revealed that over half of the parents surveyed, with an income of less than ?30,000, could not afford everything their children needed for the start of the new school year.

The report also highlighted how families may be forced to miss vital household bills or cut back on already stretched grocery bills, with over a quarter admitting they would need to borrow money in order to afford all the ?Back to School? costs.

At times like these, some parents, often those on the lowest incomes, may be tempted to turn to high cost doorstep lenders or even illegal loan sharks, but there is an alternative in the form of credit unions.

Mark Lyonette, Chief Executive of the Association of British Credit Unions (ABCUL), said: ?Credit unions have a vital role to play in today's difficult economic times.

?We understand that people are struggling with the rising cost of living. However we don?t want to see parents backed into a corner of having to choose between essential bills and uniforms or pushed into high interest debt.

?We would like to advise parents that small, responsible loans are available from credit unions for such purposes.

?If, for example, a family borrowed ?300 for six months on a typical credit union loan they would pay back ?47.90 each month and pay less than ?12 in interest. Nobody borrowing that amount from a credit union would pay back more than ?322. This compares very favourably to charges made by doorstep lenders who would be likely to charge over ?100 in interest for a similar loan.

?We are encouraging anyone struggling to cover new uniform costs, to contact their local credit union.? They also provide easy ways to get saving, helping people budget for future bills and events such as Christmas.?

To find your local credit union take a look at www.abcul.coop and call ABCUL on 0161 832 3694.

Posted at 31^st August 2009

Credit unions greet Legislative Reform Order with delight

by Ethos public relations

The publication of a Legislative Reform Order (LRO) by the Government to modernise the legal framework for credit unions in Britain has been warmly welcomed by ABCUL ? the Association of British Credit Unions ? and its members.

?We?re very pleased that a draft Legislative Reform Order to update credit union legislation in Britain has now been published,? says Mark Lyonette, Chief Executive of ABCUL. ?The proposed changes are essential if credit unions are to realise their full potential in this country and the publication of the LRO reaffirms the Government?s commitment to the sector.?

Important changes will give credit unions the flexibility to accept local community groups, companies and social enterprise into membership and allow existing credit unions to extend membership to new groups of people, such as housing association tenants and employees of nationwide companies. This will allow large numbers of people to benefit from credit union services for the first time.

Credit unions will also be able to choose to pay interest on savings instead of a dividend and develop new services to meet the needs of their members.

Mark Lyonette adds: ?These vital changes will allow the credit union sector in Britain to scale up and deliver a wider range of services to many more people across the country.?

The LRO is expected to be laid in Parliament when MPs return to Westminster in October.? The availability of the draft LRO means that the Financial Services Authority can now begin to consult on regulatory changes.

Click here to read the LRO.

Posted at 30^th July 2009

Credit Unions in Scotland: House of Commons report welcomed by sector

by Ethos public relations

ABCUL ? the Association of British Credit Unions ? 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 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.?

A copy of the report is available at: http://www.publications.parliament.uk/pa/cm200809/cmselect/cmscotaf/218/218.pdf

Posted at 23^rd May 2009

Green light for new Cross-Party Group on Credit Unions

by Ethos public relations

Members from Scottish Labour, the SNP, 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 - the Association of British Credit Unions - 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).

Frank McAveety MSP said: "Credit unions are making a difference every day in communities across Scotland. They demonstrate the value of sound money linked to ethical lending.

"It is vitally important that they have a strong voice in the Scottish Parliament and, on the tenth anniversary of the Scottish Parliament, it is right and fitting that their voices can be heard through the Cross-Party Group involving MSPs and credit unions."

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.

Credit unions offer a full range of financial services, with five Scottish credit unions providing current accounts and four offering mortgages.

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."

Posted at 11^th May 2009

Credit unions welcome Chancellor?s Growth Fund tonic

by Ethos public relations

ABCUL ? the Association of British Credit Unions ? 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 two 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.

Posted at 22^nd April 2009