Seven more credit unions launch current account

Seven more credit unions across England, Wales and Northern Ireland have launched the Credit Union Current Account.

The roll out is being supported by the Department for Work and Pensions (DWP) through the Growth Fund and this brings the total number of credit unions offering the service to 18.

"We're delighted that the roll out of the Credit Union Current Account continues apace," says Mark Lyonette, Chief Executive of ABCUL - the Association of British Credit Unions. "The addition of a further seven providers will bring this important new service to many more credit union members."

The Credit Union Current Account (CUCA) was introduced in March 2007 and over 15,000 credit union members now have current accounts. ABCUL, which provides training and support for account providers, expects to see a doubling of that number within the next 12 months.

The account offers a debit card which can be used in shops and to withdraw money from cash machines, and account holders can set up standing orders and direct debits, giving them much greater control over their finances. However, there is no overdraft facility so account holders cannot incur charges for going overdrawn.

The credit unions that have just launched the CUCA are Tower Hamlets, Just (in Shropshire), South Tyneside, Llandudno, Lewisham, Hartlepool and Newry.

The accounts are being run and promoted by the individual credit unions, but the behind the scenes IT and administration is carried out by The Co-operative Bank. As part of its commitment to tackle financial exclusion, The Co-operative Bank is a long-term supporter of the credit union movement and has played a vital role in helping the growth and progress of credit unions during the past decade.

The Department for Work and Pensions has provided Growth Fund investment to the credit unions to cover the costs involved in setting up banking services.

Parliamentary Under Secretary Kitty Ussher said: "I'm delighted to be working with ABCUL to support the introduction of current accounts to more credit unions. We want to ensure that everyone has access to mainstream financial services and this is an important step towards making that happen."

Barry Roberts, Manager of Llandudno Credit Union, said: "The ability to offer a current account has been has been a gap in our services compared with other financial institutions, so the Credit Union Current Account is the last piece of the jigsaw fitting into place.

"One of the main benefits, especially for those on lower incomes, is being able to access a debit card, which you don't get with other basic bank accounts."

According to Karen Farrow, Operations Manager at Just Credit Union in Shropshire, this is an important new service. "We are a rural credit union covering a large area and many of our members have very limited access to banking services. So, for us, the most important benefit of the Credit Union Current Account is being able to provide members with access to the mainstream banking network at a local level.

"I believe that the CUCA is fundamental to the growth and success of our credit union, enabling us to offer a wider range of services and helping us to develop professionally."

Mark Lyonette concludes: "The Government has recognised that those people who do not have a current account are at a disadvantage in society. For example, without a current account, you cannot benefit from the convenience and cost savings of direct debits. The Credit Union Current Account is enabling more and more people to access the benefits of the banking system, often for the first time, helping them to manage their money more effectively and preventing them from getting into debt so easily."

For more information, visit abcul.coop