If you’ve never heard of Credit Union before, there’s a quick guide below explaining who they are and how they work.
Given the right Government backing, Credit Unions can offer credible alternatives to payday loans. Some of the bigger Credit Unions like Scotwest and Capital offer affordable “payday loans” already, but they’re not currently available right across the country. The Scottish Government can help credit unions grow by supporting their work, promoting membership and providing a guarenteed loan funds for a start. Kezia regularly raises these issues in Parliament and directly with the Government Minister.
To find a credit union near you, click here.
Guide to Credit Unions
1. What Is A Credit Union?
Credit Unions are regulated ‘Not for Profit’, Member-Owned (mutual), Financial Service Co-operatives and can best be described as organisations that encourage their members to save together and lend to each other responsibly. This allows these members the opportunity to gain greater control over their finances.
2. How Do Credit Unions Differ From Banks and Building Societies?
Here is a breakdown of the main differences that set Credit Unions apart:
· Credit Unions believe in the creation of wealth, not debt.
· Credit Unions have NO external shareholders
· All profit is distributed amongst all members at the end of each financial year
· Select members have the opportunity to save directly from their payroll
· All members who join a Credit Union immediately own a share of it
· Credit Unions are restricted as to how high they are allowed to charge interest
· All Credit Unions (Britain) are regulated by the FSA (Financial Services Authority)
3. What Makes Credit Unions Ethical?
The primary driving force behind the Credit Union movement is to offer non-exploitative, competitive financial services to individuals from all walks of life, regardless of their social status and economic background.
This ethos is very much reinforced by the concept of ‘Self Help’. All Credit Unions require their members to commit to saving on a regular basis. This is in order for Credit Union members to help themselves secure their own long term future by encouraging them to accrue healthy funds through saving.
The above text was taking from the “About us” Section of Capital Credit Union which Kezia is a member of.