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June 27, 2012

Expand credit unions – but at what cost?

There seems genuine enthusiasm on the part of Government to expand the reach of credit unions.  A new report recommends significant investment in the sector using the Post Office network as the principle means of widening access. So far, so good. But as always the devil is in the detail. The proposals also call for complete rationalisation of the movement. Dermot O’Neil from SLCU believes this runs the risk of throwing babies out with the bathwater.



Open letter response from Scottish League of Credit Unions  to DWP’s  ‘Credit Union Expansion Project’ Feasibility Study Report 

To whom it may concern 

The Scottish League of Credit Unions welcomes the initiative to “examine the feasibility of expanding and modernising credit unions”. However, after much reading and careful consideration, we cannot support the overall position of the report as we believe the assertions contained within are based on misrepresentations of the credit union sector, including a serious misconception of un-sustainability. 

Furthermore, we believe that acceptance and progression of the report recommendations conflicts with the credit union co-operative operating principles of Democratic Member Control and Autonomy & Independence, and we therefore oppose the ‘case for investment’ and reject ‘the way forward’ as suggested in the report. 

As an alternative way forward, the Scottish League of Credit Unions invites the Secretary of State, who commissioned the report of the Project Steering Committee, to engage in further meaningful discussion in order that the future expansion and modernisation of the credit union movement is determined directly by credit unions and not conceived and imposed by stakeholder organisations. 

To aid such discussion, please see some questions/comments/considerations, listed in the sequential order as they appear in the body of the report, and on which we welcome and await your response. 

Kind regards 

Dermot O’Neill 

CEO, Scottish League of Credit Unions

One of SLCU’s members, Johnstone Credit Union has submitted a response to the proposals. Tom Kelly, who has managed this credit union since it was formed in 1979, makes a compelling case in favour of community based  credit unions . Read Tom’s response here