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Credit union wants more muscle
1:10pm Tuesday 5th August 2008
AN EAST Lancashire community could receive more financial support following the launch of a campaign.
Burnley Area Community Credit Union (BACCU) is launching the scheme in a bid to increase its share of the town’s financial market.
Up to now, government legislation has limited credit unions to small scale oper-ations but the community-based savings and loans body, which started business in 2000, now intends to raise its profile and play a larger part on the financial stage in East Lancashire.
This means members of the community could get access to larger secure loans at competitive rates.
Burnley MP and Treasury Minister Kitty Ussher is spearheading the campaign to free credit unions from the restriction and she is set to give the keynote address at the launch of the scheme at Burnley Town Hall on August 28.
Burnley’s 1,000-strong credit union is part of a growing financial sector which has matured financially and exp-anded its range of services since credit unions were given legal status in 1979.
In the near future it is hoped that it will be able to operate ISA accounts, child trust funds, link-up with other financial institutions and give customers interest on their deposits rather than a dividend.
Credit unions are owned and managed by members with all profits going back to them. They have no directors, all members are shareholders in the organisation and most of the work is carried out by trained volunteers.
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Kevin, Colne, Colne says...
7:12am Wed 6 Aug 08
I am sure that credit unions can take on a larger role but it worries me greatly that they may be able to link-up with other (mainstream) financial institutions.
In too many instances mainstream instutions design products and services to enrich themselves at the expense of the saver or investor.
The truth is that the cake of savings and investments suffer from three very serious bites. The first is by inflation, the second is from the charges levied by the financial group that looks after your money and the third comes from taxation.
Last year I saw a CTF where the provider offered the parent a free gift card if they subscribed to the product. If this was a decent product then they wouldn't need to 'give-away' a free gift-card would they? More to the point at the current rate of inflation and under the charging structure this CTF has to generate 6.0% per annum just to stand still (inflation + charging). If they manage to generate 8% over three-quarters of that is lost to the child - 4.5% by inflation and 1.5% to the product provider. This, so politicians claim, is helping us. It's insane.