London Community Credit Union

History

Tower Hamlets Community Credit Union was established in 2000 to serve as part of the council's anti-poverty initiative. A year later, the credit union was recognised as the fastest growing in the UK and became a major partner in the Department for Work and Pensions Growth Fund which promotes improved and affordable access to credit for financially marginalised groups.

In 2010, following expansion into Hackney and surrounding boroughs, Tower Hamlets Credit Union adopted the present name. The smaller Forest Gate (ELWA) Credit Union was formed in 2003, becoming NewCred Community Credit Union in 2005; Under pressure from the PRA due to falling below minimum reserves requirements, NewCred members voted to transfer engagements to London Community Credit Union in late 2014.

Activities

Members savings are pooled together and used as a common fund from which they can apply for low cost loans. Interest paid on loans is the credit union's main source of income and is used to provide services and pay dividends based on shares.

Forming part of the wider international co-operative movement, there are now 51,000 credit unions in 100 countries, enabling 196 million members to access affordable financial services. The credit union movement in the UK is less developed than other parts of the world, although the sector is growing and there are currently 580, all varied in size, membership and services. All members of a credit union must share a common bond. In the case of London Community Credit Union, membership is restricted to individuals living, working or studying in the City of London and London boroughs of Tower Hamlets, Hackney, Newham, Waltham Forest, Islington and Haringey. Relatives living with an existing member are also eligible to join.

Products

London Community Credit Union runs a payroll deduction savings and loans scheme in conjunction with the London boroughs of Tower Hamlets, Hackney and a number of community organisations. The credit union is responsible for the operation of the scheme, with the employer facilitating monthly deductions from salary. A payment card, accepted at Post Office and PayPoint outlets, can also be issued to members on request.

Unlike a bank, interest is not paid on savings accounts as profits are shared among members at the end of each year in the form of a dividend payment. Credit unions abide by the democratic principle of one member, one vote, so that all members enjoy an equal say. Members are encouraged to attend the Annual General Meeting and vote on issues, including the election of the board of directors, all of whom serve on a voluntary basis.

A member of the Association of British Credit Unions Limited, registered under the Industrial and Provident Societies Acts, London Community Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and PRA. Ultimately, like the banks and building societies, members' savings are protected against business failure by the Financial Services Compensation Scheme.