Everyone should join a credit union – they’re not just for poor people

09/12/2013

By Brid Fitzpatrick

Bishop Frank speaks to the conferenceThat was the message from a conference organised by Church Action on Poverty North East and North East Churches Acting Together.

The conference came in the wake of Archbishop of Canterbury Justin Welby’s call for churches to help put pay-day lenders such as Wonga out of business. It was chaired by Assistant Bishop of Newcastle the Rt Revd Frank White, who said of the financial crisis of 2008 that “The idols have fallen, and out of the ashes of that there is a sense that a more hopeful and humane way of managing personal finance is emerging, not least through credit unions.”

Poverty and debt are an increasing problem in the North East with many people struggling to make ends meet. Bishop Frank said that poverty wasn’t just a problem for those who were out of work: “The impact of the welfare reforms is yet to be fully felt and the impact of poverty is increasingly being felt by those who are working.”

Fr Bill Rooke, a director of North East First Credit Union, took part in a joint interview with Margaret Reynolds, a director of Shiremoor Credit Union. Fr Rooke told the conference that there are now enough credit unions in the North East for everyone to join one and it is possible to save using payroll deductions or standing orders: “There are lots of divisions in society but one of the jobs of credit unions is to be something that everyone can be part of.”

While the North East First Credit Union has around 4000 members, Shiremoor is much smaller with around 250. Margaret Reynolds pointed out that apart from lower interest loans, Credit Unions offer help with money management and where people find it hard to budget they can arrange to pay their money into the credit union and get it back in weekly instalments.

Northern Oak Credit Union’s Chief Officer, David Hall, urged everyone who can to consider putting some savings into their local credit union: “The £300 someone can afford to save can be lent to a single mother to buy a washing machine and cooker at a low interest rate. And then when she pays it back it can be lent to someone else. The more we take in savings, the more we’ve got to lend”.

But the message wasn’t just about saving. People should also consider credit unions when borrowing, say to buy a car, rather than taking out a loan with a bank or on a credit card. Credit unions need some larger loans because smaller loans cost more to service and the interest paid on larger loans helps make them sustainable as businesses.

Bishop Frank’s overall message was one of hope, despite the difficulties: “If something is really worthwhile it’s going to face opposition and what credit unions are about is profoundly worthwhile. The election of Pope Francis has brought a renewed emphasis on poverty. Churches are focusing on core Christianity based around justice and the call to love one another.”

 

 

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