James Evison 12 September 2016

Councils should provide alternative to payday lenders

Local authorities should provide alternatives to payday lenders through credit unions, according to a new report by the Co-operative Party and the Association of British Credit Unions (ABCUL).

The report, titled Credit Unions and Government: Working in Partnership - launched at the party’s annual conference in Cardiff - called on councils to build their own credit unions as viable alternatives for residents to payday lenders.

It outlines how local government can support local residents through credit unions including providing crisis loans instead of social funds, supporting social housing tenants to pay rent under Universal Credit, offer credit in competition with high-cost payday lenders, and support local start-up businesses through lending to entrepreneurs.

Examples of successful credit unions include Lanarkshire Credit Union and its ‘savvy savers’ project with schools, Cardiff & Vale Credit Union’s payroll services working with local NHS trusts and housing associations, and North London Credit Union including Sharia finance for start-ups and a principle of ethical finance.

The London Borough of Haringey offered its credit union a £750,000 subordinated loan to help residents – in two years 1500 households have been provided with loans who may have otherwise gone to the payday lending market.

Cllr Joe Goldberg, cabinet member for economic development, social inclusion and sustainability at Haringey LBC said: 'Credit unions are community-based financial co-operatives, owned by members that offer fairer financial services for their members. Credit unions are not driven to make money for external shareholders but have to make decisions in the best interest of their members.

'As well as offering accessible and affordable loans and savings products, they can offer help and support. If we want to tackle the menace of these unscrupulous lenders in our communities, we have to help credit unions grow as a viable alternative in the marketplace and there is a lot councils can do to help.

The report states that credit unions and local authorities 'have a long track record of working together' advancing financial inclusion, providing access to affordable and appropriate financial products, as well as services to local residents.

It said: 'Many of the strongest credit unions began life serving the employees of local government before extending their services – from a strong and established base – into the wider community.'

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Social Work and Social Care

Trafford Council
£100,731 to £104,625
You will join a values-driven senior leadership team, providing visible and responsive leadership. Manchester
Recuriter: Trafford Council

Housing Ombudsman

Housing Ombudsman Service
£130,095 per annum, negotiable based on experience.
The Housing Ombudsman Service allows colleagues to choose if they wish to work in the London office, from home or a hybrid of the two London (Greater)
Recuriter: Housing Ombudsman Service

Head of Legal and Monitoring Officer

Powys County Council
£90,347 – £98,135 per annum/y flwyddyn
We’re seeking an energetic, innovative, and inspirational leader to join our team at Powys County Council Powys
Recuriter: Powys County Council

Senior Business Development Officer (MaaS)

Essex County Council
£36341.0000 - £42754.0000 per annum
Senior Business Development Officer (MaaS)Fixed Term, 2-year contract with potential for extension Full Time, 37 hours per week£36,341 to £42,754 per England, Essex, Chelmsford
Recuriter: Essex County Council

Customer Advisor (Events) - Braintree District Council

Essex County Council
Up to £13.8000 per hour
Customer Advisor (Events) - Braintree District Council£13.80 PAYE / £17.67 Umbrella Braintree, EssexPart-Time, Temporary Closing Date
Recuriter: Essex County Council
Linkedin Banner