Council’s credit union investment to tackle payday lender rise
Renfrewshire Council has rubber-stamped the latest stage of a major £500,000 commitment to fight payday lenders.
Two local credit unions will now receive an investment of over £220,000 following approval by the council’s Leadership Board yesterday.
The council wants to work more closely with credit unions to make sure local people have access to their affordable rates and will now commit £200,000 to Renfrewshire Wide Credit Union (RWCU) and £27,000 to White Cart Credit Union (WCCU).
The money will support development to help the credit unions modernise services; build capacity to meet wider demand; offer a greater variety of ethical products; build on financial education work in local schools; and raise awareness of the benefits of credit union membership while also encouraging saving and budgeting.
Councillor Mike Holmes, Renfrewshire Council’s Depute Leader said: “We are willing to be bold and innovative in our two-fold fight against payday lenders and poverty – that’s why we earmarked £500,000 for this in this year’s budget.
“To tackle the sharp rise in high interest loans and the negative impact they have on families, we must make sure an alternative is in place by providing access to dependable banking services and affordable credit. And I’m delighted that one of RWCU’s new proposals is to develop an express loan.
“Credit unions can help us reduce the financial exclusion and poverty cycle that many Renfrewshire residents on low incomes and state benefits often face. This £227,000 funding will be a major step forward in ensuring they are equipped to support communities to their full potential.”
As part of the UK Government’s planned Welfare Reform programme, Universal Credit will be introduced to replace six key benefits, including Housing Benefit and it will be paid directly to bank accounts.
Not only will the claimant need a transactional account for this, but will also have to budget to ensure the Housing Benefit element is paid to their landlord. Budgeting accounts that can help tenants cope with Universal Credit (currently planned for 2016 roll out) will also be developed by RWCU as a result of this investment.
A paper recommending the £227,000 allocation was approved by the council’s Leadership Board on 4 June 2014.
Additional investment has also been made to set up the Council’s iSave Credit Union Initiative, where all S1 pupils will be offered a credit union account with a £10 deposit from the council. Application forms to join are with P7s so their accounts can be opened when they start high school in August.[/vc_column_text][vc_separator icon=”star”][/vc_column][/vc_row]