Credit Unions: Official MoneySavingExpert.com Discussion

debrag

yeah I'd like to apply online I don't want to go in and ask for a loan lol I've just joined

ahai1

Because I do some volunteering in Camden I have joined Camdem Plus Credit Union http://www.camdenplus.co.uk the level of service there is better as you can do almost everything by email and they keep you updated with the website. I don't even know when the Tower Hamlets one has an AGM. They once used to believe in replying to emails but not anymore as they go to the great email graveyard. I applied for a paypoint card online via the feedback form and no reply or no paypoint card. They also charge for BACS which is a joke, don't send out mail due to identity fraud. I would be tempted to stand for election as a director as I am not a happy customer.

I have found a facebook group for them though. http://www.facebook.com/home.php#/group.php?sid=80a76cc6ecb308067f0bd49e56be415e&gid=38888263436

ahai1

I found this article http://news.bbc.co.uk/1/hi/business/7480418.stm when are the changes likely to take place?

Isn't there a danger of lending to too many people who can't affrod to pay back?

Milarky

(How not to write an article)

I'm only quoting this in full to show how balley awful the standard of 'churnalism' is becoming (the actual changes can be summarised by the bold bits)

Credit union rules 'to be eased'

The government has unveiled a plan for credit unions to help people, especially those on low wages, beat the credit crunch.

The Treasury has announced that it is to relax the rules governing credit unions - community-based savings and loans organisations.

It is designed to help people who are having trouble either repaying debts or obtaining loans from other lenders.

Ministers fear such people could become easy prey for loan sharks.

Credit unions work as low-risk savings and loans providers, frequently for less well-off customers.

Common bond

The move comes amid concerns such customers may be particularly badly hit by the credit crunch, such as by finding it increasingly difficult to borrow money from traditional High Street lenders.

Kitty Ussher, economic secretary to the Treasury, was outlining the proposals to the new All Party Parliamentary Group on Credit Unions.

"We want to make it easier to for families to access the affordable credit on their doorstep that is offered by credit unions, rather than having to turn to more expensive schemes or, at the extreme end, illegal loan sharks," she said.

Although any area or organisation can form a credit union, they have to operate within their own communities - known as the Common Bond.

The Treasury plans measures to broaden the Common Bond, allowing the sector to expand.

By this time next year, ministers hope to get rid of many restrictions on who credit unions can lend to, allowing them to branch out by forming alliances with other unions, employers and housing associations.

They hope that by doing this, people will be able to access cheap, secure loans which they will be able to repay.

More plans

Other proposals for credit unions include making it possible for groups, rather than only individuals, to become members.

The credit unions would also be allowed to pay interest on members' deposits and charge the market rate for services such as chequebooks and money transfers.

Ms Ussher said this would remove some of the "outdated and unnecessary" restrictions that govern the sector.

The are about 600 credit unions in the UK with approximately 500,000 members and assets of £400m.

Mark Lyonette, chief executive of the Association of British Credit Unions (Abcul), welcomed the announcement.

"In particular we will be welcoming a relaxation of the common bond. This will mean that credit unions can offer their services to more people," he said.

"Our aim is for credit unions to offer millions of people in the UK a fair, responsible and safe alternative - a trusted way to make the most of their money."

So the whole thing could be stated in one paragraph (or possibly two)

This sounds much more like hope than expectation. In fact, it sounds like another version of the 'big bang' expansion of CUs that resulted in several failing in recent years (i.e.during the most benign period in economy history)

I was amazed that the 'new' proposals would allow CUs to charge for services when I've been charged for several years now for paying money into mine. Should I be asking for that money back, or does the Beeb need to do more fact checking?

Also, the usual suspect of Mr Lyonette (how apt!) claiming that from a bare base of half a million UK wide - and most of those will be in Norn Irelan for historical reasons- going to magically expand into the 'millions' of members. Sounds like that plan is predicated on 'block signing' through these touted 'alliances' with housing associations and (larger?) employers. What they won't admit is that the project has already stalled and trying to kick start it now might just result in a few more executive-level jobs being created and - a few years down the line - some more scandals of financial misdealing - but very little tangible benefit.

There's also the 'high interest rate' model which Labour (Gordon Brown as Chancellor in 2005) bequeathed us when he doubled the monthly interest rates allowed from 1% (12.68 APR) to 2% (27% APR) in what was supposedly the lowest interest-rate environment the country had ever seen. This - overnight - changed credit unions from 'Cheaper than your credit card' claims to 'Better than a loan shark!' Now, under the government's plans, the sector can 'big up' and lend (let's say) 'housing association' money (which is actually our money) to their own tenants at 'Not-a-loan-shark' rates during a recession. Well, what do you think is going to happen?

ahai1

I have a number of problems as well. I am going to burst a few bubbles.

They are not the best thing since sliced bread as I have said that my local credit union Tower Hamlets Community Credit Union charges for certain services like BACS yet when I joined the charges were not made clear and I was given minimal information and it was only later I learned about things like the inner workings of a credit union. Also they in the case of Tower Hamlets don't believe in customer services as I have requested a paypoint card through the feedback form and have not got a reply even though it has been months.

Some people compare them to banks and building societies and make statements about the level of service been better. This is not always the case as I have had good and bad service from banks and no 2 are alike.

I have recently joined Camden Plus and the service there is a lot better. I feel that the government should be a lot more honest about the fact that the credit unions are not always the right solution and not all of them are well run.

I should add though to be fair I have emailed them and it turned out that they had not got the request for the paypoint card. Though they have other customer service problems like the phone is engaged or never picked up or other requests get ignored like once I asked for directions and have not got any feedback.

Anyway if you live or work in Tower Hamlets and are interested in a savings account or a loan then you should give them a try http://www.thccu.co.uk but be warned don't expect online banking or all the services that you are used to with banks.

ahai1

I am now in contact with them but I have noticed one thing that they charge £3 a month for running a current account. You can find the details here http://www.thccu.co.uk/site/forms.php Can someone tell me why should people pay for services like current accounts and BACS? If they want members why are they doing this? My bank does most of those things for free. If the government wants credit unions to play a bigger part then they are going to have to make them offer free services and be more transparent. Just because they are owned by their members does not mean that they are transparent if you look at the Dmfermline Building Society.

Also they should like building societies and banks have a full upfront list of all their charges which they give to customers.

If Kitty Usher thinks people are going to pay for BACS and current accounts then she is in another world.

ahai1

I have read through the passbook and to be fair it does have a mention of the fact that I have to pay some fees it says that and I am not quoting but in so many words that there are charges and it does not go into detail but I can go and find them out at the posters in my local branch.

Their slogan "Is the bank you can own". I would rather not own a bank that provides minimal information and does not give you a breakdown of all their charges.

I wonder what the Ombudsman were to say if someone complained about the credit union not been fair?

I have also been informed it needs a few million in capital to run internet banking.

Frances63

Well I'm impressed!

I was about to open a Barclays 3.61% Isa (incl bonus :rolleyes:) when I read about a credit union at my place of work. They are doing cash Isas at 6% (no bonus or other catches!).

Its a variable rate (actually a dividend really rather than interest per say, but you wouldn't know any difference) and they intend to keep it at 6% for Isas. They can do this as the rate relates to the rate at which they lend money, & not directly to the BOE base rate.

There's no fixed term, you just need to give 30 days notice to get money out.

It's a big credit union and you can operate the 'regular' savings account on-line (instant access, currently 5% but expected to go down to 4% soon).

Now isn't it amazing what a not-for-profit organisation can do without greedy bankers & shareholders! :T

ahai1

Unless they changed the law I thought that a divident had to be approved by the memebers every year? I am specticle about the 6% rate as it is high and considering that credit unions charge lower rates of interest to people who banks would not touch with a barge pole I fail to understand how they can sustain the rate.

Just because it is not for profit does not mean it is looking after the best interests of the members. Remember the Dumfermline Building Society and Jim Faulds? It would be helpful if you were to give the name of the credit union and the account details as with financial products no matter who they are from they always have condicitions and if you are not careful you can fall fowl of them.

If it is the Voyager Alliance Credit Union http://www.voyageralliance.com/ on the front page it says we paid but it does not give you a guarantee. I was not able to find the product information. Also note next to the life insutance it has a star saying condicitions apply. I wonder what they can be?

I just reread your post and you did say it was a vairable rate and not a fixed rate. That means in English that the rate can change and go up or down.

beanielou

ahail1~I am slightly unware as to why you keep posting on this thread as you always seem so critical of credit unions & you seem to like pulling other peoples posts to bits.