credit unions?

opinions4u

baby_boomer wrote: »

Why would you save with an organisation whose main aim is to lend to people who are credit risks and pays you a pittance for taking on their risk?

You may be saving for something where you know you will also need credit top fulfil the purchase.

You know the mainstream banks won't help you, but there is a local credit union that specialises in supporting their exsiting savers.

I strongly believe that credit unions fill a niche and are a worthwhile enterprise and are probably closer to the needs of their members than a regional building society would be. I won't buy the concept that a credit union is a safer home for your money than a bank though.

Milarky

opinions4u wrote: »

I strongly believe that credit unions fill a niche and are a worthwhile enterprise and are probably closer to the needs of their members than a regional building society would be. I won't buy the concept that a credit union is a safer home for your money than a bank though.

The 'elephant in the room' is that of consolidation - which just won't happen; building societies need to, banks need to, but credit unions can't (in practice) achieve by merger a strengthening of their base. The only alternative is to make the creation of new credit unions much, much easier.

The law is way too restrictive and the government has been tardy addressing the real concerns. For instance the interest rate cap was raised in 2005 (by you-know-who) without discussion. Overnight credit unions went from comparing themselves favourably to credit cards to 'door-to-door lenders'. If credit unions are to remain 'mutual' savings clubs then the 'answer' might be to raise the limit on what they can charge. But if you want a vigorous sector you need to allow it to innovate. You would also need to sign up 3 or 4 times as many customers than the half a million or so there presently are*

*And (disproportionally) many of those are in N.I. for cultural reasons