Credit Union

North Wales




Gogledd Cymru

An image of the Quakers' bi-lingual symbol.


Friends and Credit Unions


The problems of financial exclusion from mainstream financial services and credit provision and the promotion of awareness amongst Friends of an ethical alternative to the legal and illegal loan sharks.


A small group of Friends in North Wales AM, with support and help from QPSW, are keen to encourage members, attenders and their local meetings to be active in supporting their local credit unions.


So, what is the issue?


Many people want a loan and, cannot, for many reasons, access the loan facilities at their local banks or building societies. This may be for a number of reasons, for example, because they are not permanently employed, do not have a bank account, are a tenant (rather than a homeowner), have a County Court judgment against them or have a poor credit rating score. Sadly, too many of these people turn to illegal local money lenders, the local (‘doorstep’) Provident agent, one of the (‘payday’) loan companies/websites; all of whom charge exorbitant interest and ruinous late payment charges. Very often, such loans are ‘rolled over’ into new more expensive loans. Crucially, such loan providers are not concerned with offering customers good financial advice and ensuring repayments are fair and manageable.

A 2016 Citizens Advice ‘Understanding Society’ report details statistically how these very high interest loans lead to people having unmanageable debt which in turn leads to high instances of family breakdown, employment and housing problems and poor physical health.


The survey looked more closely at the link between unmanageable debt and poor mental health. It was found that people with unmanageable debt are 24% more likely to have a low mental health score, if in the bottom income quarter of the population.


When looking at the relationship from a different angle, comparing the population as a whole with people with below average mental health scores, people in the bottom income quarter of the population are:

  • Over a fifth more likely to have debts
  • Twice as likely to be behind on a household bill
  • Nearly two thirds more likely to be behind on their council tax


The close relationship between unmanageable debt and poor mental health is a ‘two-way causation’. Debt can both contribute to, and be a product of, poor mental health.

A 2012 House of Lords report on credit unions and financial exclusion found that more than 50% of people who have loans demanding very high interest payments have never heard about credit unions or how they operate and an even higher percentage are unaware of the presence of their local credit union.


What are credit unions?


Credit unions are an ethical and customer-centered locally based fair alternative to the legal and illegal loan sharks.


They are local membership not-for-profit co-operatives/mutual societies that offer ethical, affordable loans and mutual and ethical savings accounts at rates that are competitive with high street banks and building societies. All the people who have savings or loans are the members of their credit unions from whom the management board is elected by the membership.


Each credit union’s members must have a ‘common bond’, that is, live in the local area covered by the credit union or have a common affiliation; for example through employment. Importantly, time is spent with people who want loans in order to agree realistic and affordable repayment schedules.


Governed by the Co-operative and Community Benefit Societies Act (2014), credit unions are given permission to operate by registration and are regulated by the Bank of England’s Financial Conduct Authority (FCA), which guarantees Credit Unions’ deposits, and the Bank of England’s Prudential Regulation Authority (PRA) to which credit unions must submit annual financial accounts. All money saved in a credit union is protected by the Financial Services Compensation Scheme, up to £75,000.


The first credit union in Britain began trading in 1964, and over the last 50 years credit unions have grown to provide loans and savings to more than 1.2 million people across England, Scotland and Wales. Credit unions have a proven track record across the world. In fact, 217 million people are credit union members in 105 different countries.


Within the strict rules and regulations governing how credit unions are governed and operate, individual credit unions are diverse in shape and size, how they operate on the ground, whether they cover rural or urban areas, the levels of local unemployment and poverty and the scope and range of services they provide. A few (usually larger ones) offer extra services such as online express loan facilities, cash-based Child Trust accounts, ISA’s, funeral plans, savings and loan repayments via payroll, current accounts (features may vary), budgeting and debt management.

Each credit union usually began as the idea of a group of committed local individuals, often with the help of their local authority. Through mergers and opening more branches, some credit unions have grown to cover a large area.


All credit unions are run by paid employees and nearly all are supported by volunteers in many and varied capacities; as a customer services person in a branch, in administration, marketing and serving as a director. It is therefore difficult to generalise on the type and level of support and assistance that each credit union requires.


Why might Quakers help?


Supporting your local credit union is a way our Quaker meetings and their members and attenders can make a difference whilst upholding our testimonies in our own communities in a part of the economic system that can seem exclusive, harsh and remote to many people.


How might Quakers help?


This webpage hopes to encourage individual Quakers and their meetings to find out more about their local credit union and ask them how Friends can help their work. This might include your meeting opening a savings account with them instead of using the local bank. Your meeting might prefer to know that its money was being put to good use both ethically and locally - and receiving interest! Savings are protected just like bank savings.


Your local credit union may want volunteers for a few hours each week. You might have people with knowledge, experience and skills they need or people who are willing to learn.


Your credit union may need help with marketing their services. Is your meeting house situated where it could be used for a few hours each week as a paying-in facility?


Remember that Friends also may want personal or meeting loans at times - why not consider a credit union loan?


To get started, follow this link below and just enter a local postcode and press search.


If, for any reason, this link does not give helpful results, try phoning the Association of British Credit Unions (ABCUL), the umbrella organization for UK credit unions, on 0161 832 3694. They are very enthusiastic and helpful.


If you wish to visit the website of a well operated award winning credit union, visit this link.


Please note that the content of this website was produced by the North Wales Area Quaker Meeting Credit Union Group with the support of Quaker Peace and Social Witness (QPSW), the Quaker UK body who conduct and manage Quaker central peace work both in the UK and in many overseas locations.

Economic Justice Group

North Wales Credit Union Group