ABCUL - the Association of British Credit Unions - has responded to the publication today (15 June) of the Office of Fair Trading's final report on its review of high cost credit.
Speaking on behalf of the sector, Mark Lyonette, Chief Executive of ABCUL, said: "Despite strong growth in recent years, many more credit unions visible and accessible on the high street and new products such as the Credit Union Current Account, we can't fail to agree with the OFT's analysis that credit unions' effectiveness and ability to compete with high cost lenders is limited by their scale, which prevents them from enjoying economies of scale and offering extended opening hours.
"New legislation due later this year will allow credit unions to expand on partnerships with housing providers and employers and allow many more social housing tenants and employees to benefit from credit union membership.
"But to really have an impact on high cost credit, credit unions need to be visible and accessible in every community. That's why our work with Post Office Ltd to allow people to join their local credit union and carry out transactions in any Post Office is so important.
"Support for the sector to collaborate and work together behind the scenes would be an extremely cost effective way to make access to affordable credit and safe savings available to millions more people. Millions of pounds could be kept in low income communities instead of leaking out to high cost credit providers such as doorstep lenders and rent to buy stores."
The OFT report can be downloaded at:
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Notes to Editor:
ABCUL is the main trade association for credit unions in England, Scotland and Wales. At the end of June 2009, ABCUL's 325 credit unions were managing nearly £450 million of members' savings on behalf of over 550,000 people, and had over £375 million out on loan.
ABCUL is the country's largest development, information and training network for new credit unions. It is a democratic, not-for-profit organisation and is improving day-to-day operations, legislation and regulation for all credit unions.
Credit unions are licensed deposit takers, authorised and regulated by the Financial Services Authority. They are covered by the Financial Services Compensation Scheme, so the first £50,000 of a member's savings are completely safe.More Articles by ABCUL ...