Archdiocese of Southwark JPIC Spring Assembly

1. Archdiocese of Southwark  JPIC Spring Assembly Credit Unions Clive Lambie Director, Croydon Merton & Sutton Credit Union

2. What is a Credit Union? • A savings and loans co-operative • Member-led (no FAT cats) • A social enterprise • Demonstration of the Big Society (A bank but not a bank)

3. What is the purpose of Credit Unions? • Promoting wise money-management • Observing a ‘common bond’ • Ethical lending • Keeping more money in the community • Addressing financial exclusion & the ‘unbanked’

4. What do Credit Unions do? • Encourage people to get into the habit of saving • Encourage members to save regularly and borrow sensibly • Offer an affordable alternative to other high rate lenders • Move people from borrowing to saving • Help people to get out of debt • Help people to build up a savings balance that will give them a better option if they need to borrow in the future • Calculate loan interest on the reducing balance – makes loans more affordable

5. How do Credit Unions work? • Shareholders/members • Secure Savings (shares) • Affordable Loans • Surplus distributed as Dividend to members

6. How are Credit Unions run? • Limited Companies • Board of Directors (volunteers) • Paid Staff • Volunteers • Supervisory Committee • Auditors

7. Credit Unions Worldwide • 49,330 credit unions in 97 countries • 183,916,050 people as members • The credit union movement grew quickly throughout America and Canada and soon began to have an influence on the rest of the world. • Credit unions in Jamaica began during the 1940s. Father John P Sullivan, a Jesuit priest, believed credit unions could help working people cope better with wartime conditions • In Ireland the first credit union was founded in 1958 • In Ireland, over 70% of the population belong to a credit union. In America and Canada the figure is around 43%. Credit unions are also growing fast in Eastern Europe, parts of South America, Africa and the Far East. • The World Council of Credit Unions represents the credit union movement globally.

8. Credit Unions in the UK • 350 credit unions in the UK, over 800,000 members • More than £550m in savings, over £450m on loan • What are the Common Bonds? • What is the target membership? • What are their differences? • What ‘products’ do they offer? • How are they regulated? – FCA & PRA (ex-FSA) • Deposits are FSCS backed • ABCUL

9. Credit Unions in South London, Kent and Medway (1) • Croydon Caribbean Credit Union: • For people who reside in the London Borough of Croydon or have an association with the Caribbean. • Croydon Merton & Sutton Credit Union: • For people residing in or employed in the London Boroughs of Croydon Sutton & Merton. • Greenwich Credit Union: • Individuals living or working in the boroughs of Greenwich or Bexley. • Hastings & Rother Credit Union: • For people who reside in or are employed in Hastings Borough and/or Rother District.

10. Credit Unions in South London, Kent and Medway (2) • Kent Savers Credit Union: • People residing or employed in Kent (including Medway) and Bexley. • Lewisham Employees Credit Union • Lewisham Plus Credit Union • People residing or employed in the London boroughs of Bromley and Lewisham, and SE19. • London Mutual Credit Union: • Open to people residing or employed in the London Boroughs of Southwark, Lambeth or Westminster. • Wandsworth Community Credit Union: • For people residing in or employed in the London Borough of Wandsworth. • Wantsum Savers: The Isle of Thanet Credit Union: • For people who reside in or are employed in the Isle on Thanet.

11. Other Credit Unions in the South-East (1) • Aylesbury Credit Union • Brent Shrine Credit Union • Camden Plus Credit Union • Community Saving and Loans Berkshire Credit Union • Ealing Credit Union • Family Assur Friendly Society Emp Credit Union ‘Find Your Credit Union’: www.findyourcreditunion.co.uk • Hillingdon Credit Union • K & C Credit Union London Plus Credit Union • London Community Credit Union • LTD Credit Union • M for Money Credit Union • Milton Keynes Credit Union

12. Other Credit Unions in the South-East (2) • National Federation of Retail Newsagents (NFRN) Credit Union • National Fire Savers Credit Union • Newcred Community Credit Union • North London Credit Union • North West London Credit Union • Open University Employees Credit Union • Oxford Credit Union Credit Union • PCS Credit Union • Plane Saver Credit Union • Radio Taxicab (London) Credit Union • Solent Credit Union • Surreysave Credit Union • Thamesbank Credit Union • The Rainbow Credit Union • Waltham Forest Community Credit Union • Waltham Forest Council Employees Credit Union

13. Challenges facing Credit Unions in the UK • Benefit changes: • Universal Credit • Benefit cap • Bedroom tax • Bad Debt • Competition from ‘doorstep’ lenders • FCA/PRA regulatory regime • FSCS contributions

14. The Credit Union difference: loan interest on the reducing balance Typical CU loan (12.7% APR): Loan requested:£500 Interest charge: £30 Total payable: £530 50 weeks interest charged on outstanding balance £345 in the member's pocket for their family Typical door-step lender (up to 4000% APR): Loan requested: £500 Charge for credit: £375 Total payable: £875 50 weeks @ £17.50

15. Regulatory regime – FCA & PRA • FCA = Financial Conduct Authority • PRA = Prudential Regulatory Authority (both Bank Of England) • Limited Companies • Both Deposit Takers and Lenders • Approved persons regime • Reporting requirements • Financial requirements • Governance requirements • Regulatory powers

16. Questions (& Answers?)