Council supports credit unions

Southampton’s ‘co-operative’ City Council wants to make the city a ‘Credit Union Zone’ by supporting Southampton’s two credit unions, which are community-owned and run financial organisations that let their members save and take out low-cost loans.

To build the capacity and strength of credit unions, the council is encouraging its employees to sign up to a scheme which makes a deduction from their salary that will be ‘banked’ by a credit union and available to withdraw – as with a savings account. This will also allow the credit union to make low cost loans.

Loans from credit unions can help some people who may otherwise turn in desperation to loan sharks or expensive pay day lenders, and the scheme’s partly been set up in response to suggestion from local campaign Southampton Sharkstoppers

Striking a deal

"The council responded to our requests explaining that the payroll deductions could be sorted with little or no cost involved to the council or the credit unions,” said Ryan Carter from Southampton Sharkstoppers. "This was our first win and we look forward to working with the council on future initiatives on financial inclusion.

“Thanks to our first ask being fulfilled and working alongside Solent Credit Union we struck a deal - the deal was that for every two savers recruited through our campaign, they would make available one loan to someone at risk of going to a pay day lender. This will hopefully mean that as we progress less and less people get forced into using a pay day lender and that the credit union will become the norm as it is in other parts of the world.”

Phil Tyler, vice-president and a director of Solent Credit Union, said: ”Following the package of measures that Southampton City Council have recently introduced, we now feel much more confident that our credit union can build capacity, and help more of Southampton’s residents to save and to borrow with us.”

'Delighted'

Councillor Simon Letts, leader of Southampton City Council, said: “I am delighted that this initiative shows our continuing support for credit unions and that Southampton will continue to deliver as a Co-operative Council. Co-operative Councils does not mean the council “doing to” local communities, but instead “doing things with” local communities - working in partnership with residents, employees, businesses, co-operatives and mutuals in Southampton.”

Links
Solent Credit Union’s website is at http://www.solentcreditunion.co.uk

United Savings and Loans Credit Union website is at http://www.usal.org.uk/