third-sector.co.uk

The DWP Feasibility study on credit unions is out with no real surprises.

There’s cash on the table for phased developments and it looks like the cap on interest rates may be raised to 3% pcm.

The report recommends that credit unions:

• Reduce costs by 40%.
• Automate loan decision-making.
• Introduce IT support systems/platforms to provide the online banking.
• Work with landlords to increase membership.
• Work with the Post Office to increase accessibility.

The study also suggests that the DWP will be working with only around half of those credit unions and CDFIs it is already contracted with, that is 60 organisations will be funded. The criteria for selection is outlined on page 20.

You can download a copy of the credit-union-feasibility-study-report

Find out more about third-sector.co.uk’s business planning service for credit unions.

• Thinking of offering interest on savings?
• Looking to reduce back office costs?

This free seminar could help.

Offering interest on savings is a great opportunity for credit unions, but how exactly do you:

• Meet the FSA requirements?
• Manage the key risks?
• Develop the right product mix?

The event will be held in London on 8th June. Find out more,  sign up for the seminar or contact us for more information.

SurreySave Credit Union has been open for exactly one month and so far 135 people have joined, depositing over £150,000; a record for the credit union movement.

One of the emerging themes from our early work has been the serious problem with ‘pay day’ or ‘high cost’ lending in Surrey. Over half of the loan applications  received showed a history of borrowing money from pay day lenders, often at rates of more than 4,000% APR. As access to credit continues to be restricted it seems likely that this problem will only get worse.

Consumer Affairs Minister Ed Davey MP is supporting a group working to bring credit union services to the Royal Borough of Kingston upon Thames, in his constituency.

Kingston Savers, which is supported by Kingston Voluntary Action (KVA), wants to extend Surrey’s newly-formed credit union Surrey Save to the royal borough.

KVA chief executive Hilary Garner said: “Credit unions exist to help their members help themselves, encouraging them to develop prudent financial habits and understand the true cost of credit. Whenever possible, they assist those who struggle to make ends meet, helping them up the ladder to financial health.”

KVA has earmarked £50,000 of a £252,000 grant given by the council last November to help develop the scheme.

Kingston and Surbiton MP Ed Davey said: “This is hugely exciting and should bring affordable help to people struggling with their finances.

“The Government is trying to develop the credit union sector, not least to act as non-profit competition to the high-cost lenders, so it is welcome to see this initiative.

“It has my full support and I hope many people will take part.”

Changes to the Credit Unions Act have come into force that will allow credit unions to change their rules to allow them to provide services to new groups and develop new services and partnerships.

The restriction that meant that everyone eligible to join a credit union had to have something in common has been removed.  Credit unions are now free to extend their reach and work with organisations such as housing providers, employers and charities to bring financial services to new groups of people.

Credit unions will also be able to choose to provide services to community groups, social enterprises and businesses, helping organisations that need financial services and attracting investment into communities.

Paying interest instead of a dividend is also now an option for some credit unions, making their savings products much easier to compare.

“These changes are a major breakthrough in the delivery of credit union services to communities around Britain,” said Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions.

“The new rules mean credit unions can now compete more effectively with banks and other lenders to provide fair and affordable financial services to individuals and orgnisations. Credit unions will be able to reach many more people, helping them to develop a savings habit, which can only be good for communities.”

Speaking in November, Financial Secretary to the Treasury Mark Hoban said: “I want to see credit unions grow to meet the needs of their members and communities they serve. The LRO is key to that and I am pleased that it has now passed through Parliament. I look forward to hearing how credit unions will use these new powers when they come into force in January.

“Adrian has brought wisdom, creativity and a depth of knowledge to the process that has proved invaluable. We have found him to be an excellent colleague and would not hesitate in employing him to develop further projects.” Eileen Halligan, CEO, Central Liverpool Credit Union.

If you are too busy with the day to day to plan for the long-term third-sector.co.uk can help you  draw up a business plan to guide your credit union as it considers:

• The DWP Feasibility Report, automating services, reducing back office costs and positioning your credit union for investment.
• The LRO and applications to the FSA to expand your field of membership, offer corporate accounts and offer interest bearing savings accounts.
• Developing loan products for lower risk borrowers to balance your loan portfolio.
• Improving credit control and recovery of bad debts.
• Ways to bring down the cost per loan to help achieve sustainability.

Our business planning package includes:

• A health check with an analysis of your regulatory returns, accounts, management information and policies and procedures manual.
• A site visit to review operational systems.
• A planning workshop for staff, volunteers, directors and stakeholders.
• Support for fundraising, including positioning your credit union for DWP Modernisation Fund investment.
• Continuity with new legislation: you can use the business plan to help with any post LRO applications to the FSA.

We have drawn up business plans for seven credit unions, large, small and just starting out. Contact us for more information or a no-obligation quote.

It takes just three minutes for you to support SurreySave Credit Union – a new and real alternative to the high street bank.

Unlike many other financial service providers, SurreySave will be a community-based organisation. We’ve applied to NatWest Community Force for funding to help us set up groups of local volunteers who will help us reach out into your neighbourhood.

You can read more about the project here. You can also read more about SurreySave on their website.

To vote for SurreySave please follow these steps:

1. Register to vote for Community Force.

2. You only need to check the box that you agree to the terms and conditions of community force; you do not need to agree to receive any marketing emails from Natwest.

3. Check your email and follow the link to confirm your registration.

4. Log in.

5. Follow this SurreySave link and vote for our project. You have three votes in total so you can also choose to support other community organisations at the same time.

Thanks for your support!

The Directors of SurreySave together with newly appointed CEO, Michelle Dollard

The new SurreySave Credit Union has achieved its formal registration as a new credit union from the Financial Services Authority.

This means that the credit union will be open for business at the start of 2012 offering affordable loans and safe savings for everyone in Surrey.

third-sector.co.uk has been working with volunteers on the project since 2009, wrote the SurreySave Business Plan, assisted with funding and led negotiations with the FSA.

David Wright, chairman of the Board of SurreySave said “We have been working for a very long time to reach this point.  The Financial Services Authority has scrutinised our business plan and agreed that we now have enough funding to establish our long awaited credit union.

“We know that there are many people in Surrey who need our services, many of whom have been turned away by the mainstream banks.  We will provide an alternative to high cost credit and loan sharks – helping families to keep their financial heads above water.

“We will also provide a safe home for people’s savings, which are 100% guaranteed by the Financial Services Compensation Scheme.  We aim to pay a reasonable dividend to our savers who will have the added benefit of knowing that their savings are being put to excellent use in our local community and help to support the Surrey economy in these difficult times.

“I want to thank the members of the Board and our supporters who have shown such loyalty and faith in SurreySave, and to our partners who have helped us to find the funds to launch the Credit Union.”

SurreySave will launch in January 2012 across the county offering loans and savings products.  More information will be available prior to the launch.  In the meantime, anyone who wants to be a founder member of SurreySave or to receive regular updates on our progress can register their interest here.

This is an exciting and unique opportunity to lead Surrey’s newest mutual which is expected to receive approval by the Financial Services Authority in the next month.

SurreySave will be a not-for-profit financial co-operative which is owned and run by its customers, who become members. Credit unions offer a safe and convenient way to save money and provide loans at fair rates of interest.

With no shareholders to pay and deep roots within the community, SurreySave will offer a real alternative to the high street bank.

We are looking for a self-starting business minded CEO with in-depth financial knowledge. You will have a track record of success in operating a business, building partnerships and excellent negotiation and communication skills.

Please visit www.surreysave.co.uk for more information.

Third-sector.co.uk is proud to announce the launch of  ‘Connect and Grow’ our new e-mail based marketing service especially for credit unions.

Deliver attention grabbing marketing campaigns to your members at an affordable price, often for under 2p per message.

Find out more …