News / Shetland credit union by April
SHETLAND’S first credit union will open in April after a 10 year struggle to achieve accreditation.
This week the Financial Services Authority agreed to register the Shetland Islands Credit Union as a trading company.
After volunteer staff have been trained, the credit union is expected to open its doors at 8 Hillhead, Lerwick, in two months. Accounts will also be accessible through post offices and local banks.
The news was welcomed by the local branch of the Citizens Advice Bureau, which said that it might help the less well off avoid getting into debt and becoming vulnerable to loan sharks.
The credit union will allow people, including those on low incomes, to open bank accounts and borrow money at a low interest rate after saving for three months.
Membership will be restricted to adults living or working in Shetland and all deposits are covered by a national financial services compensation scheme.
Dividends for savers should be higher than bank interest rates and there are no banking fees.
Shetland Islands Council employees will be able to have money deducted from their payroll directly into the credit union.
To set up the credit union, the steering group has raised around £50,000 from the SIC, the National Lottery, European LEADER funds, Hjaltland Housing Association and Morton Lodge.
People will be invited to join by paying a £3 subscription and an annual general meeting will be held on 31 March to appoint a committee to run the organisation.
Steering group chairman Gordon Mitchell said it had been a gruelling process to gain FSA accreditation after the rules became a great deal stricter following the banking crisis of 2008.
However all credit unions are underwritten by the Scottish League of Credit Unions, which means that people’s savings will never be lost.
“This will be an excellent way of saving money safely in Shetland and it will also help a lot of people who are targeted by loan sharks for quite small amounts of money and once captured can’t escape,” Captain Mitchell said.
“Another thing is that a lot of jobs demand that you have a bank account, but major banks won’t look at you if you are a small income earner. With a credit union you only have to pay your £3 deposit and you have a bank account.”
Lerwick CAB manager Les Irving said that in may parts of the US and southern Ireland, credit unions were the “bank of choice”.
“CAB fully supports the idea of setting up a credit union because it’s an alternative form of lending with more attractive rates of interest than the bigger banks,” he said.
“The evidence from places where there are credit unions is they can destroy loan sharks, and that can only be a good thing.”
Become a member of Shetland News
Shetland News is asking its many readers to consider paying for membership to get additional features and services: -
- Remove non-local ads;
- Bookmark posts to read later;
- Exclusive curated weekly newsletter;
- Hide membership messages;
- Comments open for discussion.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a member of Shetland News by either making a single payment, or setting up a monthly, quarterly or yearly subscription.
Already a member? Sign in to hide this message.
