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January 6, 2009

UK credit unions launch current accounts

by Gill Montia

Story link: UK credit unions launch current accounts

The Association of British Credit Unions (ABCUL) has reported that seven of its members have launched current accounts.

Tower Hamlets, Shropshire-based Just, South Tyneside, Llandudno, Lewisham, Hartlepool and Newry are now providing the facility, bringing the total number of UK credit unions offering current accounts to 18.

The move has the support of the Department for Work and Pensions and the new accounts come with a debit card and the opportunity to set up standing orders and direct debits.

However, they differ from most bank current accounts in that there is no overdraft facility.

Credit unions operate on ethical principles and primarily offer savings accounts and loans, although many now provide a range of other services including benefits direct, Individual Savings Accounts and Child Trust Funds.

The IT and administration function for the current accounts is being supplied by The Co-operative Bank, itself a mutual.

According to ABCUL, credit unions are owned and controlled by their members and each has a “common bond” which determines membership.

Criteria include living or working in the same area, working for a particular employer or membership of an association, such as a church or trade union.

 

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