Benefits of Credit Union outlined

SNP Candidate Lynne Devine has spoken of the merits of being a member of a Credit Union after a recent visit to the Angus Credit Union office in Castle Street, Forfar.

She said: “At this time of financial difficulty for everyone, I think membership of a Credit Union is the way forward. It’s a not-for-profit organisation and works for its members – not shareholders.

“After saving for a short period of time, you can get a loan to help with bills or something like furniture, but unlike most loans, you pay back at a very low interest rate.”

Development Officer Paul Mitchell explained that for a £100 loan, a member would repay £103.37 over 24 weeks, whereas with other loan organisations people could be paying as much as £149 over 24 weeks which builds up hugely over time and puts people in more debt.

Paul also mentioned that after someone has joined, they can easily pay into the Credit Union either by direct debit or by cash at Angus Council access offices.

Paul goes out to schools to do workshops and engage young people in thinking about finance at a very basic level. This includes looking at income and outgoings and how sometimes it’s just not possible to afford everything you want.

However, encouraging the habit of saving is one of Paul’s major aims for these young people. It’s working because in something like 15 primary schools across Angus the Credit Union now has young members who understand how important saving is.

Following Lynne’s visit to the Angus Credit Union, it emerged the Office of Fair Trading (OFT) is launching an extensive review of the payday lending sector, looking at lenders’ compliance with the Consumer Credit Act and the OFT’s guidance on irresponsible lending.

The review will involve on-site inspections of 50 major payday lenders and surveys of industry and consumer organisations.

Leading up to the review the OFT has conducted a sweep of payday lending websites and written to the main trade bodies, outlining areas where it considers that advertising standards need to be improved.

The evidence gained during the review will be used by the OFT to boost standards across the sector and drive out companies that are not fit to hold consumer credit licences.

The final report of the review will be published later this year.