Joy WetherillWelfare Rights Unit Manager

Chris Smyth Chief Executive Officer Leeds City Credit Union

Affordable Credit

Joy WetherillWelfare Rights Unit

ManagerLeeds City Council

One-Stop Centres

• LCC has 15 One-Stop Centres across city• Centres deal with all aspects of Customer

Service• Decision made to remove cash counters• Great opportunity to integrate credit union

services with those of LCC• Fulfilling the needs of mutual customers• Working together to the benefit of the

community

Partnership Working

• LCC helping credit union with issues around ID and providing appropriate documentation

• LCC promoting credit union services to clients who are un-banked and need an account for their benefits

• Post Office Card Account will NOT accept Local Housing Allowance

Partnership Working• LCCU offers accounts for tenants through

which they can pay their rent and other bills

• LCCU provides accounts for School Clothing Vouchers so people do not have to use cheque cashing shops

• Bond Loan available from LCCU (bond and first month’s rent)

• LCCU Handiloans for those unable to get credit elsewhere

Chris SmythChief Executive OfficerLeeds City Credit Union

About LCCU

• Started in 1987 for employees of LCC

• Expanded in 2001 to “Live or Work”

• Merged with 6 small church and community CUs

• Large as a Credit Union but small compared to Competitors

• Head Office and 10 branches across the city

Our Partnerships

• Positive partnership with LCC

• Utilising former cash offices in One-Stop Centres

• Partnering with Customer Services to give holistic service

• DWP, LCC, ALMOs, Charities

Financial Inclusion

• Credit Union an important partner in LCC’s FI strategy and delivery

• Research recognised the need for local face-to-face services for low income consumers

• Also recognised the economic impact on the city’s prosperity of exclusion

Low Income Consumers

• Deserve decent, appropriate and affordable services just as much as those who are better off

• Use many services that are unsafe and/or expensive such as:– Hamper schemes e.g. Farepak– Coin meters e.g. Telebank– Doorstep credit with interest rates as

high as 800%

What do they need?

• A face-to-face, one-to-one friendly and approachable service

• Somewhere local to save a few pounds a week

• Simple products, easy to understand

• Help with basic budgeting and paying their bills

• Affordable credit

The Growth Fund

• £36m from the Financial Inclusion Task Force HM Treasury

• Administered by DWP through contracts with third sector lenders – CUS and CDFIs

• Provides the capital to make loans and the revenue to run the service

• Continues to 2011

Affordable Credit• £300 from doorstep lender:• £15 a week for 32 weeks - pay back £480

(APR 399.7%)• £300 from the credit union• £10 week for 33 weeks – pay back £325

(APR 26.8%)• Save £5 week - £165 extra to put away for a

rainy day or spend

The Future

Improved Credit Union Legislation Expected October

• Changes to the Common Bond• Wider Range of Products and Terms• Ability to accept Funds from Bodies, e.g.

clubs

Eric ThompsonFinancial Inclusion Services

(Yorkshire) Ltd

Affordable Credit in Sheffield

• 3 organisations – One Vision

• Financial Inclusion Services (Yorks) Ltd

- a registered charity

• Moneyline Yorkshire (IPS) Ltd

- an ethical loan company

• Sheffield Credit Union

- a savings and loans co-operative

What do we provide

• Instant loans at affordable rates

• Access to cheaper loans when a repayment history has been established

• Encouragement to save

• Payment of benefits direct

• Help with budgeting

• Financial Capability

What have we achieved• Over 5000 instant loans per year• Totalling over £1.5m• Saving over £2m on doorstep rates • 10 Community Credit Unions merged• Over 5000 adult members• Over 2000 junior members• £813k savings, £739k ‘normal’ loans• 91% of clients from Closing the Gap areas

Sheffield Investment Bond• Open to individuals and organisations

• Championed by City Council’s CEO

• Guaranteed repayment in 5 years

• No interest

• Capital lent to Places for People

• Interest paid to Moneyline

• £750k raised, £110k given to Moneyline

Partnerships

• Local Strategic Partnership

• Financial Inclusion Consortium

• Advice Consortium

• Debt Support Unit

• Sheffield City Council

• Sheffield Homes & RSLs

• University of Sheffield

Current developments

• Basic bank accounts• Transaction banking• Pre paid debit card• Holistic delivery of services• Out reach provision• Possible South Yorkshire Credit Union• Financial Capability• Work with offenders & their families

Thank you

Any questions?

Contact DetailsJoy WetherillJoy.p.wetherill@leeds.gov.uk

Tel: 0113 214 9009

Chris SmythChris.Smyth@leedscitycreditunion.co.uk

Tel: 0113 214 5254

Eric ThompsonEmail: ericthompson@fisy1.co.uk

Tel: 0114 276 0787

Mobile: 07749094689