Credit unions link up to safeguard savings

The savings of thousands of people living in
one of London’s poorest boroughs will be safeguarded if an
innovative rescue package for Camberwell Credit Union is approved
as expected.

CCU was suspended by the Financial Services
Authority (FSA) last August after it reported a shortfall of
£160,000. Up to 3,000 members faced losing savings, but UK
credit unions rallied together to raise the shortfall.

The rescue package will involve Southwark
Credit Union taking over CCU members.

Credit unions are not-for-profit financial
co-operatives that offer low-cost loans and savings to members,
often in poor communities. Chancellor Gordon Brown has praised them
as a cornerstone in tackling social exclusion.

A spokesperson for the Association of British
Credit Unions Ltd (Abcul) said the case was an example of the
credit union movement pulling together.

“If credit unions had not contributed to the
rescue package people would have lost money,” she said, adding that
Abcul hoped the deal would be approved in the next few weeks.

The FSA, which regulates credit unions in the
UK, cannot comment on rulings before they take place.

– Scotland’s 138 credit unions were last week
invited to apply for grants of up to £4,000 each to help
improve services to the public. They have to spend the funds on IT,
staff or volunteer training and business development.

“Far too many people in hard-pressed
communities cannot access the financial services which others take
for granted,” said Scottish social justice minister Jackie
Baillie.

Drumchapel Credit Union, which was set up in
1970, is Scotland’s oldest credit union.

It runs a scheme which helps people pay off
large or multiple debts by getting them into a regular habit of
loan repayment.