Crisis talks to decide future of credit union

Southwark Council and Southwark Credit Union in south London are
working with the Financial Services Authority, local businesses and
MPs to rescue neighbouring Camberwell Credit Union which had its
accounts frozen earlier this year.

A meeting is due to take place this week to draw up a rescue
strategy to help the union’s 2,500 members, made up of local people
who have limited access to conventional finance facilities. The
members face the loss of up to 40 per cent of their joint
£200,000 savings with the union.

“The immediate aim is to get a merger with Southwark Credit
Union – but that needs money,” said a spokesman for the FSA, which
currently supervises credit unions. Camberwell needs between
£160,000 and £200,000 to save it from liquidation.

Credit unions are mutually-owned financial co-operatives, with
members united by a common bond, usually through an association,
occupation or geographical location. They offer alternative access
to financial services for people on low incomes.

From July 2002 credit unions will be fully regulated by the FSA
and members will come under the Financial Services Compensation
Scheme, receiving the same protection as savers with banks.