Legal

The Financial Services Authority (FSA) is the independent watchdog set up by government to regulate financial services in the UK and protect the rights of retail customers such as you.

What is a credit union
Credit Unions are mutual savings and loans societies. Membership is based on a ‘common bond’, something which links members together. For example, it could be that members live or work in the same area or work for the same employer.

The credit union movement has been growing strongly. There are about 700 credit unions in Great Britain with over 300, 000 members and around £200m in assets.

In other parts of the world, the credit union movement is very large. The movement is particularly strong in the USA , Canada , Ireland and Australia .

What services do credit unions offer you?
Credit unions aim mainly to encourage people to develop a habit of saving. Once a member has established a savings record as a reliable saver, they will then be entitled to borrow from the credit union. The amount a member can borrow is usually limited to no more than three times the amount the member has saved.

Usually members of credit unions borrow small amounts to pay for holidays, for Christmas presents, or to replace household items such as TVs or washing machines. With Kerrier & The Fal Credit Union

When you borrow from a credit union you are generally given free life assurance cover to the value of the loan. So the loan will be repaid if you die before it is fully paid up.

Why people choose to join a credit union

• Credit unions are run by volunteers elected by members of the credit union. You can get involved in making decisions and getting things done.
• Credit Unions are not allowed to charge more than 1% a month on loans (APR 12.68%). So they are an alternative to loan sharks who charge much higher rates of interest.
• Credit Unions can pay up to 8% a year on their savings (depending on membership & revenue). They operate on a not for profit basis so any operating surplus money left over from running the credit union can be repaid to members in the form of a dividend on their savings or used to improve the services to members
• Credit unions in Great Britain now come under the regulations of the FSA. This means that those running credit unions in GB will be approved by the FSA & they will have to comply with certain rules in the way they run the credit union.

FSA Consumer Helpline 0845 606 1234