A credit union is a profit-sharing financial co-operative which offers convenient savings and low interest loans to its members. The members own and manage their credit union themselves, and it is democratically run: one member = one vote.
The main aims of a credit union are:
to encourage its members to save regularly;
to provide loans to members at fair rates of interest;
to provide members with help and support on managing their financial affairs (if required).
What are the main benefits of a credit union?
it is an easy and convenient way to save and borrow
it offers loans at a fair rate of interest
it (usually) offers insurance at no direct cost
each year it usually offers a dividend on savings. A dividend is like the interest rate on a traditional savings account.
it can be a way to learn new skills, either as a volunteer for the Credit Union, or through your own improved financial management
Credit unions can provide a focal point for a community by bringing people together to work alongside each other for their own benefit and the benefit of the community as a whole.
A credit union can help to revive the local economy by keeping money in the community. Loans to members can mean income is spent in local shops and businesses.
How does a credit union differ from the banks and others?
A credit union exists for the benefit of all members on a not-for-profit basis. There are no outside shareholders or speculators taking your profits.
Any 'profits' generated are used to build the security of the credit union and the rest is returned to members as an annual dividend.
Members will build up their financial credibility in the credit union by saving on a regular basis.
Credit Unions are a source of ethical investment
Who can join a credit union?
People who join a credit union must belong to what is called a 'common bond'. This could be that you reside in a specified area or you work for a particular employer or that you are a member of a club or association. Each ‘common bond’ is unique.
How safe is my money?
Very safe. All credit unions have to comply with the Credit Union Act 1979. They are strictly regulated by the government through the Financial Services Authority (FSA).
Only registered credit unions are allowed to use the term ‘Credit Union’.
Each credit union is audited annually and has Fidelity Bond Insurance to cover against theft and fraud
Every credit union also has a supervisory committee to keep an eye on the day-to-day running. The Board of Directors will also operate policies to reduce the chance of bad debt, as well as chase any bad debtors.
The Financial Services Compensation Scheme ensures that a member’s savings will never lose their value.
Credit unions are not a new or a purely local phenomenon. Modern Credit Unions have been in existence since 1854, when Friedrich Raifeissen founded the first Credit Society in Germany to alleviate financial poverty among farmers.
Credit unions are active in over 80 countries now, and over 118 million people world wide are members. 30% of Americans and half the population of Ireland are members of Credit Unions. The first Credit Union in Britain was established in 1964 and by September 2003 there were over 650 Credit Unions with 463,000 adult members, and around 50,000 junior members. British Credit Unions also had over £406 million in assets.
Contact Us
If you have any questions please conact the CIP Group (Finance Section).
CIP Group (Finance Section)
Treaty Centre, High Street, Hounslow, TW3 1ES
Tel: 020 8583 2415
Email: admin@hounslowcreditunion.co.uk
Useful Information
Thamesbank Credit Union Ltd. is a Credit Union local to Brentford, Isleworth, Osterley and Chiswick.
Tel: 020 8568 4112 / 020 8573 8010
Links to some helpful resources are listed toward the top right of this page.