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Credit Unions

Introduction

Credit unions are owned and run by their members, for their members. The Credit Union movement in Northern Ireland dates back to the 1960s. There are currently 181 credit unions here serving over 400,000 members.

What the law says

The Credit Unions (Northern Ireland) Order 1985 says what credit unions can and cannot do. Also, all credit unions must register with the Registrar of Credit Unions and Industrial & Provident Societies of Northern Ireland. The Registrar tells the credit unions how they must operate and examines their financial statements each year.

Useful information

Members of a credit union must have something in common. This is known as the common bond. It can be as simple as living in the same village or town, working in the same occupation or for the same employer, or being in the same organisation. To become a full member of a credit union, you must be over 16 years of age, have the common bond and buy at least one share in that union. Shares are valued at £1.00. As a member, you are entitled to say how your credit union should be run. You can do this at the annual general meeting, where you have one vote regardless of how many shares you have. People under sixteen years of age may save up to £10,000 but cannot apply for a loan. Neither can they vote or hold any office. The most shares (or savings) a full member can have is £15,000 or 1.5% of the total shares held by that credit union, whichever is the greater. Members will often receive an annual return on their savings, although this is not guaranteed. Loans are available to members at the interest rate of 1% per month on the amount outstanding. Credit unions often make loans to people who for one reason or another can't get a loan from anywhere else. Before making the loan, the credit union will consider things like:

• the member's past savings record;
• his ability to repay;
• the purpose of the loan; and
• the availability of funds for loans at that particular time.

As well as offering savings and loan facilities, some credit unions offer their members low-cost insurance.

What to do if you have a complaint

Write to the Chairman of the Credit Union's own Supervisory Committee. If, having got his reply, you still feel you've been treated unfairly and the Credit Union belongs to an association of credit unions, write to the association to see if they can help. The address and phone number of two of the associations are shown below. If you believe that the Credit Union has acted illegally, you should write to the Registrar of Credit Unions. The address and phone number are also shown below.

From category: Money Matters