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Welfare Reform: Impact on your business strategy and practical solutions Matt Bland Policy & Communications Officer

Welfare Reform: Impact on your business strategy and practical solutions Matt Bland Policy & Communications Officer ABCUL. ABCUL. Main trade association for credit unions in Britain. 245/395 credit unions in England, Scotland and Wales Owned by its members

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Welfare Reform: Impact on your business strategy and practical solutions Matt Bland Policy & Communications Officer

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  1. Welfare Reform: Impact on your business strategy and practical solutions Matt BlandPolicy & Communications OfficerABCUL

  2. ABCUL • Main trade association for credit unions in Britain. • 245/395 credit unions in England, Scotland and Wales • Owned by its members • Industrial and Provident Society – governed by volunteer directors elected from membership, by membership • Information, lobbying, training, services.

  3. Credit unions

  4. What is a Credit Union? • A financial co-operative owned and controlled by its members • Volunteer directors elected from membership • One member, one vote • Membership based on “common bond”

  5. Credit unions in Britain • Around 400 credit unions • From 200 to over 25,000 members • Products - • Affordable Credit • Safe Savings • Insurance • Mortgages • Cash ISA, Children’s Savings, Christmas Accounts, etc

  6. Credit Union Growth 1982 - 2012

  7. Banking products • Credit Union Current Account • VISA Debit card + LINK ATM network • Not reliant on high penalty charges to cover costs • Credit Union Pre Paid Card • Owned by the credit union movement through ABCUL and its members • No monthly or annual fees • Low, transparent, transaction fees

  8. Credit unions andhousing associations

  9. Credit unions and housing associations • Strong relationships around the country • Increased interest from housing associations readying themselves for challenges of Universal Credit from Oct 2013: • 1 payment per month • Proactive bill payment • Payment per household, not per person • Many credit unions are working on developing a budgeting or “jam jar” account solution – ABCUL working to co-ordinate • Possible Government contract

  10. How can credit unions support housing providers and tenants? • Secure payment through current account or BACS (potential for “jam jar” accounts) • Better financial health: • Less money going to high cost lenders • Savings pot built for planned and unplanned • expenses • Confidence to pay utilities directly • Access to other services including insurance etc • Help with financial education

  11. Example process 1: Current Account

  12. Example process 2: BACS

  13. How can housing providers support credit unions? • Not just direct revenue funding • Hands on support: • Marketing • Premises • Volunteers • Deposits / investments • Promote credit union service to staff • Assistance with strategic partnerships

  14. Case studies

  15. 1st Alliance Ayrshire CU, Irvine Housing & Cunningham Housing • HA staff trained in credit union joining and borrowing processes - agreed referral systems in place and information for new tenants • Funding for Credit Union Current Account • Fuel poverty loans and white goods scheme • Arrears and evictions down • Expertise of housing staff improving skills on credit union board

  16. Matched savings schemes • 3 credit unions in London • With financial support from the RSLs, tenants encouraged to save by paying them a one-off reward for meeting certain targets – e.g. a certain amount or period of regular saving • Draws on findings of the Saving Gateway pilots which found that matched savings schemes greatly increase saving amongst low-income people

  17. Helping people own their own home • New ‘super hospital’ in Glasgow – initiative to encourage staff to move closer • First time buyers - up to 90% mortgage along with interest free deposit • Mortgages supplied by Glasgow Credit Union / deposit supplied by NHS Credit Union (interest-free) • Backed by Glasgow Council, NHS Greater Glasgow & • Clyde and Cruden Homes • Scheme recognised with National Credit Union Award

  18. Current developments

  19. Legislative reforms • Landmark legislative reforms came into effect January 2012 • New flexibility in ‘common bond’ gives new options for partnerships – no longer restricted to those credit unions in your area • Many examples of extensions outside of original area – Affinity Sutton conducting tender for national credit union partner • But – important to remember credit union ethos • and advantages to economic localism • Should be seen as another rather than a default option

  20. DWP’s Credit Union ExpansionProject • Up to £35.6 million to be invested in credit union expansion and modernisation • Aims to double credit union membership – to 2 million – and save the public £1 billion in interest – compared to high cost – by 2019 • Collaborative business model, shared services, economies of scale – drive down costs and improve consistency of service • More diverse membership – higher incomes • Potential link with the Post Office • Good news but tension with financial inclusion work

  21. Contact details • Tel – 0161 832 3694 • Email – info@abcul.org • Web – www.abcul.coop • Find Your Credit Union – www.findyourcreditunion.co.uk

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