Why credit unions in south Lincolnshire are a lifeboat in a sea full of sharks and shylocks
'We're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence.'
This was the uncompromising message delievered to Errol Damelin, chief executive of the UK’s number on payday lender Wonga, from none other than the Archbishop of Canterbury, the Most Reverend Justin Welby, in July 2013.
With this declaration of war on short-term and payday lending, with their pulling power of instant decisions and quick payment of money into their customers’ accounts, Dr Welby did more for the cause of credit unions than anyone else had in their 50 years of existence.
Dr Welby, Work and Pensions Secretary Iain Duncan Smith and Camilla, Duchess of Cornwall, are among the nearly 1.64 million people who are credit union members in the UK, according to the latest figures from the Bank of England
Andrew Phillips, marketing officer for Lincolnshire Credit Union (LCU), said: “We are a non-profit, financial organisation for people who live and work in Lincolnshire.
“Our products include savings accounts, life insurance and affordable loans with quite low APRs (annual percentage rates) of interest, against those of payday lenders.
“We’re there to keep people’s money safe in the community and the money that comes in from our members goes out to our members.
“Essentially, anyone who is a member of a credit union has a share in the company and we have around 3,000 members at the moment.
“But we’re going through a huge development in time for the summer when we’ll be offering more financial services online.”
At the heart of LCU, which has its headquarters in Lincoln, is its six Access Points all run by volunteers in Alford, Boston, Lincoln, Skegness, Holbeach and Deeping St James.
Carol Precey, a volunteer with Deepings LCU at The Institute, Deeping St James, said: “We’re open every Wednesday from 11am till 3pm and from next Wednesday, we’re going to be in the Deepings Community Library where we’ll be trying to tell people about LCU and how it can help them.
“It’s a good way to save money and quite a few people join credit unions because they are ethical savers who only want to see their money lent to people in genuine need.”
Andrew added: “Access Points offer to people who live outside of Lincoln a chance to get the help available to them from the LCU.”
Included in the figures from the Bank of England in January were the number of young savers in UK credit unions, just over 230,000, total assets which come to just over £2.8 million and total loans to members of £1.25 million.
In an effort to increase their popularity, both the Labour and Conservative/Liberal Democrat Coalition Governments invested £113 million into about 150 credit unions and so-called social investment providers between 2006 and 2012, with a further £38 million to come up to next month.
Roger Seal, a volunteer at LCU’s Acccess Point at The Reading Rooms, Holbeach, which is open on Fridays between 11am and 2pm, said: “Payday and money lenders don’t have the best interests of the community at heart.
“But we’re aware of the fact that there seems to be something in the culture of British people which makes them have a sturdy sense of independence and self-sufficiency which says ‘I don’t turn to other people if I’m in a mess’.
“But with things like universal credit and other changes to welfare benefits coming our way, there are going to be a number of people suffering considerable hardship. Therefore, credit unions are almost like an idea whose time has come after what the Archbishop of Canterbury said about the pernicious (harmful) nature of money lenders.”
Speaking when he was the Bishop of Durham during a debate in the House of Lords on November 28 2012, Dr Welby said: “It used to be said, in the old days, that you could not take away people’s beds and cloaks because they were essential for life.
“That’s in the Hebrew Scriptures, but today equivalent things are being taken away as a result of the very high rates of interest (charged by payday lenders and loan sharks). It’s a moral case (that) is bad for the clients and bad for all of us in this country when permitted to happen.”
Deepings and Holbeach LCU Access Points both opened in the summer of 2014 at The Institute, Deeping St James, and The Reading Rooms, Holbeach, respectively.
Rev Mark Thomson, Curate of Priory Church, Deeping St James, said: “Most of us probably have bank accounts and credit ratings that enable us to borrow easily from the established banking organisations.
“But there are some in our local community who have to resort to payday loans and even loan sharks to borrow small sums of money, at extortionate rates of interest.
“LCU provides a vital service to such people by helping them with their savings and providing vital funds for those who need an affordable loan.”
Rev Rosamund Seal, vicar of All Saints Church, Holbeach, said: “When we set the LCU Access Point up, we thought it was a natural extension of what we were doing with Holbeach Community Larder and hot lunches.
“It encourages people who weren’t brought up to save money to come here for advice, but they also learn that they can trust us with their issues and problems.
“In short, they feel as if they’re part of a community.”