Credit union accounts

creditcontroller

BarclaysManager wrote: »

Because again, it's about the ability to compete, which leads me on to...



Apparently you don't seem to understand the concept of competition in a business sense. Go and read the comment I originally replied to: a comment about credit unions offering a wider range of products and competing with banks from a poster who has already stated they're fed up with HSBC.

How are they going to offer a wider range of products when they're essentially just rebranding our own services, and rely on us to provide them? A spade is a spade is a spade.

Perhaps if you could put aside your evident disdain for banks, you might be able to see what I originally meant.

Oh, and by the way - you might consider the fact that even mutual societies and the like still have a responsibility to generate profit for their owners, the customers just happen to be the owners.

And like all humans, even building society and credit union customers are greedy and want their fair share of the profits, or they want better interest rates, etc. What does this cause? It causes the business to expand, not to stagnate. And what happens when things get bigger? Take a look at the Halifax or Woolwich pre-take over.

I hate to spoil it for you, but the dream of a country full of little credit unions would just make a country that couldn't compete on an international stage and cause our economy to take a step back.

So many Credit Unions are merging now, the days of a country full of little Credut Unions are a thing of the past...

ahai1

Hopefully they will take away some of the customers from people like Barclays as they will be left with people like white racists in South Africa and Robert Mugabe.

On a more serious point don't credit unions offer higher rate of retuns on savings and lower rate of interest in lending?

baby_boomer

take Coventry Building Society: they run out of HSBC, and they are massively bigger than any credit union you'll find. They don't even have their own sort code range

Although they do have their own sort code, since you don't have to add your account number as a "reference" when paying into one big Cov HSBC account, which is the norm at most BSs.

Re credit unions - when recession comes, I do worry about the quality of their loan books.

creditcontroller

baby_boomer wrote: »

Although they do have their own sort code, since you don't have to add your account number as a "reference" when paying into one big Cov HSBC account, which is the norm at most BSs.

Re credit unions - when recession comes, I do worry about the quality of their loan books.

I see your point but the Ethos of a Credit Union is to lend to people who may not be able to borrow from main stream banks as well as people with a better credit history.

ahai1

To all of you who work in credit unions without breaking any rules can you tell me how much increase in business have you seen?

With the mregers and that kind of stuff are we going to see things like internet banking? Sorry I could not think of a word to replace banking with.

creditcontroller

ahai1 wrote: »

To all of you who work in credit unions without breaking any rules can you tell me how much increase in business have you seen?

With the mregers and that kind of stuff are we going to see things like internet banking? Sorry I could not think of a word to replace banking with.

Mmm, I would say that Internet banking, generally is a long way off.... With regards to any increase in business that's prompted me to find out. Interesting point, thanks! It's a bit difficult to estimate at this time of year as loan applications have already started to increase due to Christmas.

ahai1

I mean by the number of new customers.

Milarky

Credit unions are creatures of regulation. They can't innovate because they have to operate under the strictist rules of all the [FSA] regulated types of 'firm'- which presently includes not being able to pay (a known rate of) 'interest'. Instead they have to go through a financial year, have a meeting and recommend a dividend before they can pay their savers anything (Actually they can have the meeting and NOT recommend any dividend at all - which is what happened in the one I belong to a year back)

They also have a very high percentage interest rate - up to 2% per month - for loans. With a potential for '0%' for deposits and 26%pa for loans they are now promoted on the basis - not that they are 'not banks' - but on the basis that they are 'not' door-to-door spivs and loan sharks. That's because they are less attractive than any high street bank would be for anyone whose credit-worthiness is above the (say) bottom 20% of the population's.

So CUs can be likened to a 'poor-persons bank' (since they only make sense for 'poor people' to join) whereas a bank, a building society are far more flexible - being able to pay any rate of interest they chose and having loan rates based on a competitive market rather than a legal cartel scheme designed to ward off the loansharks. That makes the latter able to attract customers from a wide cross-section of society - which is the basis of their long-term health and prosperity.

In my view what needs to change are the rules under with CUs labour. They should be able to be formed and dissolved much more readily and to merge or enter into relationships with the whole range of FSA regulated firms - not simply other CUs.

This would allow the CU-specific virtues (and perceived virtues) to be realised - but not under the current straightjacket operation which condemns many CUs to failure (and we saw several CUs fail even before the credit crunch started - during the 'good times' in other words.)

I fear that Labour has formed a dewy-eyed attachment to their little miners'-savings-club concept which in reality they are stangulating with red tape and restrictions - and they will simply be too slow to wake up and change those rules.

ahai1

I am playing a wait and see game before I commit fully to the CU but the idea is attractive. I will vote for a reasonable divident at the AGM.

Bernard_Coleslaw

Milarky wrote: »

Credit unions are creatures of regulation.....

(Excellent post snipped)

I fear that Labour has formed a dewy-eyed attachment to their little miners'-savings-club concept which in reality they are stangulating with red tape and restrictions - and they will simply be too slow to wake up and change those rules.

For the avoidance of doubt, I fully agree with everything you've said here. And if there is a reason why organisations like CUs will have difficulty in competing, it is this - red-tape and restrictions. Nothing to do with back-office infrastructure (or a perceived lack thereof) at all.

Pity, really. That 20% of the population you mention deserve better.