English credit union members find a new home

MANCHESTER and LONDON, U.K. -When members of Camberwell Community Credit Union found themselves without a credit union, the Southwark Credit Union stepped in. Starting this month, Southwark took over Camberwell’s operation and is fully servicing the members’ existing accounts. Members lost no money in the transfer. The transfer was a success based on work by the Association of British Credit Unions, Ltd. (ABCUL), said the Financial Services Authority (FSA) Member of Parliament Harriet Harman. Southwark Credit Union, based in London, opened in 1983 to serve employees of Southwark Council. In 1997, it merged with another credit union. Credit unions in the United Kingdom have been extremely limited in the types of products and services they can offer. However, regulations are loosening thanks to a change of regulators from the Registrar of Friendly Societies to the FSA. Southwark has taken advantage of the changes and in September 1999 it became the first credit union to change its scope from serving employees to serving anyone who lived or worked in a defined geographic area. Southwark Credit Union has 2,500 members, three offices and assets of over 3million (US$4.34 million). Shaun Spiers, ABCUL CEO said, “I am very pleased that this transfer has been completed, and delighted that ex-Camberwell members will again have full access to credit union services.” A total of 160,000 in donations and loans was raised to enable the transfer to go through. All but 30,000 – from Southwark Council and a local benefactor – came from the credit union movement. “I am delighted that the movement has demonstrated such solidarity and self- reliance. Southwark Credit Union, in particular, is to be congratulated for its role in achieving this positive outcome,” Spiers said. However, Spiers used the situation to issue a cautionary message: “The collapse of Camberwell Credit Union is a sobering lesson that, for all their contribution to society, credit unions are businesses. They must have properly trained boards of directors; effective credit control and procedures for recovering bad debt; and a clear focus on their core business of savings and loans, rather than on peripheral objectives that might contribute to a wider social agenda but risk weakening them as businesses.” Spiers pledged to work closely with credit unions and the FSA to see the continued growth and strengthening of the movement in the United Kingdom. -