NI Credit Unions Must Be Allowed to Offer More Services

Session: 2008/2009

Date: 17 February 2008

Reference: ETI 07/08/09

Increasing the services that credit unions offer would help to tackle financial exclusion. That’s the message from the Committee for Enterprise, Trade & Investment’s Report into the role and potential of credit unions in Northern Ireland.

The Report, published today, recommends that credit unions should be able to offer a full range of financial services, including facilities to pay both benefits and wages into an account.

Speaking about the Report, Committee Chairperson, Mark Durkan MP, MLA said, “It is essential, if we are to tackle financial exclusion that credit unions are allowed to offer all the services that their members need.

“We have an exceptionally strong credit union movement here—over 400,000 people in Northern Ireland are currently members. This is a much stronger base than in Great Britain but, perversely, credit unions here are much more restricted in the services they can offer. The credit union movement has the potential, if permitted, to bring the full range of financial services to those who are now financially excluded.

“The Committee’s recommendation is for regulation to move to the FSA to enable credit unions here to offer the full range of services that their counterparts in Great Britain can offer.

“Some people resort to high cost doorstep lenders because they can’t access affordable credit from banks. If people could have their wages and benefits paid directly into their credit union this would encourage saving and help people to borrow responsibly.

“As well, the uptake of Child Trust Fund vouchers is much lower here than any other region. The Committee believes that, if credit unions are allowed to accept Child Trust Fund vouchers, our uptake would be much increased.

The deputy Chairperson of the Committee, Jennifer McCann, MLA added, “At present, credit unions are very restricted in the services they are allowed to offer compared with their counterparts elsewhere. This report shows how the barriers faced by credit unions can be broken down to bring new opportunities for members and for communities.

“An important recommendation in the report is that credit unions should be permitted to reinvest some of their assets into community development and community enterprises. This represents a fantastic opportunity for community assets to be reinvested in those communities.”