The Co-operative party is to lead calls for a push to treble the UK membership of credit unions, in order to battle exploitative payday lenders.
The Co-op party, which works in partnership with Labour, will promote policies that would swell credit unions’ membership to 3 million within 10 years at the latter party’s annual conference.
A credit union is a financial co-operative that is owned by its members and exists primarily to provide savings and loans to these members. Unlike banks, they are not ultimately motivated to create profit for external shareholders.
The coalition government has already pledged to invest in credit unions, but Gareth Thomas, chair of the Co-op party, will call for specific targets on membership in Manchester this week, according to reports in the Guardian.
He will also call for workplace contributions, direct from payrolls, to support credit unions, while expressing support for Labour leader Ed Miliband’s pledge to levy payday lenders and give the proceeds to mutuals.
“There needs to be a change in attitude from public sector bodies to encourage employees to join a credit union,” Thomas added.
Earlier this month, Bank of England statistics revealed that credit unions now hold over £1 billion in deposits.
The figures also show that membership of credit unions exceeded 1 million people at the end of March, up by 6.8% in just 6 months.
Speaking to Blue & Green Tomorrow, Frank McKillop, policy manager at the Association of British Credit Unions (ABCUL), said that the Co-op party’s target should be achievable, as around 2,500 Britons now join a credit union each week.
“Ongoing development of new technology, new products and partnerships with employers should make credit unions an even more attractive option for consumers from all walks of life over the next decade,” he said.
“Where credit unions get this right, fast membership growth is entirely possible – such as in the US, where one in three Americans is now a credit union member.
“More and more credit unions are offering a wider range of financial products including pre-paid debit cards, current accounts and even mortgages, and are increasingly seen as a viable alternative to other financial services providers.”
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