Conservative and Liberal Democrat peers are planning an amendment to the Government’s bill on the use of dormant assets that would see funding divided equally between the proposed Social Investment Bank, which would fund voluntary groups, and the funding of youth facilities. As the bill stands, youth services are listed as the first recipient of the estimated £350m of unclaimed funds from banks and building societies. Financial inclusion projects are second and the “social investment wholesaler” is third in line.

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23 January 2008
© Helen Warrell, Third Sector

Mark Lyonette, Chief Executive Officer said “I’m so pleased to announce Project Delta is underway. As a result of ABCUL attracting further support from the government to continue the scaling up of the credit union sector we are underway with this key project. Project Delta aims to support over 80 credit unions directly, (those currently involved in the DWP Growth Fund project) and the wider movement indirectly. Visits are already underway to the credit unions involved. The central goal of the project is to support those ‘Growth Fund’ credit unions to deliver the maximum benefit to people who are financially excluded. Many of these credit unions are new to capacity based lending, had little experience of targeting users of doorstep credit and will need help in changing. Our experience of introducing PEARLS into Britain suggests that many of these credit unions are capable of reform but may need help in identifying and implementing change. This project provides PEARLS as a tool to all growth fund credit unions to help direct and support their financial analysis. Project Delta will link training to a process of organisational change and not simply a menu of training offered to growth fund credit unions.

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24 January 2008
© ABCUL

ABCUL – the Association of British Credit Unions – and Co-operativesUK have wholeheartedly welcomed Government support for a successful mutual sector with the publication of a document setting out the Government’s intention to modernise legislation for co-operatives and credit unions. “We are delighted that the Government has come forward with such positive proposals for a review of credit union and co-operative legislation after a huge response from the sector to its consultation in the summer,” said Dame Pauline Green, Chief Executive of Co-operativesUK. “We look forward to working with them to implement the changes over coming months.” Dame Pauline added: “For co-operatives in particular, we are pleased that the Government has listened to our calls for a review of the £20,000 withdrawable share capital, and its acceptance that this needs uprating. We have already commended the Government’s move to permit the use of electronic communications between societies, their members and the statutory authorities, announced in October, and we are happy that the Government has noted our request for a review of the regulatory regime, and that it will further evaluate this and several other issues raised in the consultation.” Speaking on behalf of credit unions, Mark Lyonette, Chief Executive of ABCUL, applauded the Government’s plans. “We are pleased that the Government has accepted calls for a liberalisation of the credit union common bond, to allow wider and more flexible membership for credit unions. We are also enthusiastic about Government proposals to allow credit unions to admit corporate bodies to their membership and to pay interest on members’ deposits.”

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10 January 2008
© ABCUL

The Association of British Credit Unions – has welcomed the Government’s Financial Inclusion Action Plan, which sets out the Government’s objectives for the next three years from April 2008, and its continued commitment to scaling up third sector lenders. The £135 million funding announced in the plan includes £38 million over the next three years to increase consumer access to affordable credit through credit unions and other third sector lenders. Mark Lyonette, Chief Executive of ABCUL, said: “We are delighted that the Government continues to recognise the valuable role of credit unions, and we are pleased that it is increasing its support and commitment to the sector over the next three years.” ABCUL also welcomed the commitment from the banks, outlined in the plan, to support third sector affordable credit, including action to develop provision in 25 priority areas around the country. Mark added: “We are enthusiastic about the banks agreeing to work with us on expanding the coverage and capacity of the sector, as recommended in the report of the third sector credit Working Group of the Financial Inclusion Taskforce.” The Working Group report, which has also been published, contains details of what the sector, banks, government and other stakeholders need to do to achieve a step change in the coverage and capacity of credit unions and other third sector lenders. Mark Lyonette is a member of the Working Group. “We have been calling on the banks to increase their support for credit unions and we are pleased that that these two important publications back our position,” explained Mark. “We very much welcome the banks’ commitment, and we look forward to working with them and the Government to achieve the financial inclusion objectives.”

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6 December 2007
© ABCUL

People struggling with debt are being helped by a range of government initiatives. The fourth cross-government Over-Indebtedness Annual Report examines action that is being taken to tackle the problem. Highlights in the report, which was published today, include:
BERR’s £47.5m face-to-face debt advice project has gone from strength to strength. More than 500 debt advisers have been recruited and trained, and more than 66,000 people have been helped. The biggest ever nationwide crackdown on loan sharks and illegal lending is now underway. New specialist teams have received £3m to hunt down loan sharks across England, Wales and Scotland. DWP’s £42m Growth Fund is increasing access to affordable credit, mainly through credit unions. As of October 2007, over 46,000 loans had been made with a total value in excess of £20million. MoJ included a package of measures designed to improve and extend the range of options available to assist the over indebted and those in multiple debt situations in the Tribunals Courts and Enforcement Act 2007. The “now lets talk money” campaign is raising awareness amongst intermediary organisations and the financially excluded of the availability of free face-to-face financial advice, the availability of more affordable credit and the value of opening a bank account. To date, the campaign has made contact with more than 2000 intermediary organisations. DWP’s £42m Growth Fund is increasing access to affordable credit, mainly through credit unions. As of October 2007, over 46,000 loans had been made with a total value in excess of £20million

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3 December 2007
© Department for Business, Enterprise and Regulatory Reform  (National)

Patrick Collinson, writing in this weeks money section of the Guardian believes that British credit unions are set to lose what he calls their ‘Cinderella’ status thanks to the Governments intention to ease membership restrictions and it’s commitment to publish a consultation paper on legislative reform for the sector. The measures, campaigned for by ABCUL, and announced by economic secretary Kitty Ussher during a visit to Manchester last week, would see credit unions moving away from what he calls “almost Victorian regulations reflecting their industrial heritage”. He argues that the current common bond system has drawbacks that only serve to exacerbate situations such as the closure of Streetcred in Rochdale: “When a small building society fails, that industry is quite good at persuading another local society to absorb it and prevent any loss of confidence among savers and borrowers. But a credit union can’t acquire another, as that would mean stepping beyond the terms of its “common bond”.

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1 November 2007
© ABCUL

Economic Secretary and City Minister Kitty Ussher will today signal her commitment to the mutual sector by delivering two key reform proposals requested by the sector. Ms Ussher is in Manchester to meet with leading members of the cooperative and credit union sector. The Minister will announce that the Government will publish a consultation paper in December 2007 setting out how it intends to take forward legislative reform for the credit union and cooperative sector. The Minister will also announce that she fully supports calls from the sector to relax membership qualifications for credit unions - usually referred to as the common bond, and to allow electronic communication between cooperatives and their members and other stakeholders. Currently the scope of the common bond (membership qualification) for credit unions is restricted by law to, for example, residing in a particular locality, following a particular occupation, being employed by a particular employer. For example, a housing association could not affiliate with a single credit union because its properties could be established over several geographic sites.

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25 October 2007
© HM Treasury (National)

Total UK personal debt at the end of August 2007 stood at £1,363bn. The growth rate increased to 9.9% for the previous 12 months which equates to an increase of £115bn. Total secured lending on homes at the end of August 2007 stood at £1,148bn. This has increased 10.8% in the last 12 months. Total consumer credit lending to individuals in August 2007 was £215bn. This has increased 5.5% in the last 12 months. Total lending in August 2007 grew by £9.5bn. Secured lending grew by £8.5bn in the month. Consumer credit lending grew by £1.0bn. Average household debt in the UK is £8,873 (excluding mortgages). This figure increases to £20,635 if the average is based on the number of households who actually have some form of unsecured loan. Average household debt in the UK is £56,309 (including mortgages). Average owed by every UK adult is £28,707 (including mortgages). This grew by £160 last month. Average outstanding mortgage for the 11.8m households who currently have mortgages is £97,209. Average interest paid by each household on their total debt is approximately £3,725 each year (this equates to 9% of take home pay). Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,524 per average UK adult at the end of August 2007. Britain’s personal debt is increasing by £1 million every 4 minutes.

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1 October 2007
© Credit Action

A report out today (Thursday 27 September) which examines the circumstances of people experiencing debt problems in Wales has been welcomed by Social Justice Minister Dr Brian Gibbons. The report by the Foundation for Credit Counselling marks the tenth anniversary of the Welsh Centre for Credit Counselling, which provides counselling and advice to people with debt problems. With consumer debt in the UK at the record level of £1,355 billion, and the number of people seeking help and advice on debt issues increasing the Minister said the “Debt in Wales” report is an important step in helping Government understand what is a complex social problem. The report has found that over the last five years: People experiencing debt problems are getting older, with the proportion of those seeking help in the over-60 age group more than doubling over the last five years. The 40 to 59 age-group is overtaking the 26 to 40 age group as the largest percentage of clients. More women have debt problems than men and their relative numbers are increasing. Of Welsh clients, 44 percent are homeowners, compared with 39 percent for the UK as a whole.  On average homeowners owe around three quarters more than tenants.

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26 September 2007
© Welsh Assembly

Lib Dem Treasury Spokesman Vince Cable MP addressed a fringe meeting organised by ABCUL – the Association of British Credit Unions, at the party’s autumn conference, which examined the impact of financial exclusion on the poorest in society. Mr Cable expressed his strong support for the work being done by credit unions to tackle this significant problem and the need to scale up the sector to increase access to affordable credit. The meeting was organised by ABCUL in partnership with Cattles plc, a financial services group specialising in providing consumer credit to non-standard customers in the UK, and was entitled ‘A Financial Wilderness? The social impact of the rapid increase in credit exclusion of our poorest citizens’. “It is clear that credit unions have a crucial role to play in relation to financially excluded and non-standard borrowers,” says Vince Cable. “But although there have been warm words of support for the last decade, for credit unions and mutuality more broadly, progress is still painfully slow. Government should be looking at the regulatory barriers which prevent credit unions achieving the status they have in, say, Ireland or the USA.” In addition to supporting the value of credit unions, Vince went on to talk about the need to scale up the sector. Only by scaling up the sector will credit unions be able to deliver the increased supply of affordable credit that is desperately needed. Chief Executive of ABCUL Mark Lyonette welcomed Vince Cable’s support for credit unions and his party’s commitment, in its policy document on poverty, to “support the development of credit unions, and ensure that these are better publicised”.

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20 September 2007
© ABCUL