Working with Housing Providers
Credit unions and housing providers
Housing organisations have a long history of working with credit unions to ensure their tenants have access to appropriate financial services. As financial co-operatives, owned and controlled by their members, credit unions only exist to meet the needs of their members. They provide safe and affordable financial services to nearly a million people in Britain.
Changes to the Credit Unions Act 1979 make it easier for housing providers and credit unions to work together to ensure that all their tenants can access safe and affordable financial services, even where a housing providers’ stock is spread across a wide geographical area.
The Changes
Allowing credit unions to serve more than one group of people
Credit unions no longer have to prove that all the people eligible for membership in a credit union have something in common. So they can choose to provide services to different groups of people within one credit union. Credit unions which are linked to a geographical area are limited to a common bond of 2 million potential members
What does this mean for housing providers?
A credit union which is already providing services to a geographical area could provide services to all employees and tenants of a housing provider, even if many of these people lived or worked outside of the area which the credit union currently serves.
Allowing credit unions to provide services to corporate bodies and community groups
Credit unions can choose to serve companies, social enterprises, community groups etc. Only 10% of members of a credit union can be corporate members.
Credit unions can also seek investment by offering deferred shares, which are transferable but not withdrawable and are only repayable in limited circumstances. Deferred shares count towards the capital of a credit union.
What does this mean for housing providers?
Local community organisations such as tenants’ associations could join the credit union and use the financial services it provides, if the credit union's rules allow this.
A housing organisation which wishes, for example, to assist its local credit union to increase the supply of affordable credit in a community or increase the capital of the credit union by depositing money can do so, if the credit union's rules allow this.
Credit unions can also choose to pay interest on deposits, instead of a dividend. This could make saving in a credit union more attractive, and help credit unions to mobilise savings.
How to make this happen
If you want to help local tenants and community groups to use credit union services, or join as a corporate member:
- Talk to credit unions you already have a relationship with and see if they are planning on offering services to unincorporated associations and businesses, or see if they could extend their common bond to provide services to all your staff and tenants.
- If you need to get in touch with credit unions you can visit www.findyourcreditunion.co.uk or contact ABCUL on 0161 832 3964.
