A new credit union has been formed by the Church of Scotland, and other denominations, which aims to show banks and pay day lenders a fairer approach to finance.
The Moderator of the General Assembly of the Church of Scotland, the Rt Rev John Chalmers, joined the Archbishop of Canterbury, Most Rev Justin Welby, and the President of the Methodist Conference, The Rev Ken Howcroft to launch the Churches Mutual Credit Union (CMCU) in London this week.
The CMCU, which also includes the Scottish Episcopal Church, and the Church in Wales, will offer a range of savings and loan products.
Fairness will be at the heart of the CMCU’s values. Initially members will be able to invest in the ‘Founder Member’s Bond’ with ordinary savers accounts and loans becoming available in March. In due course CMCU will offer ISA savings accounts.
At least 60,000 people, notably ordained ministers, elders, employees and trustees of churches and church charities are eligible to join, along with churches and Church of Scotland and Anglican charities.
Rt Rev John Chalmers said: “About 35,000 ministers, elders and workers in the Church of Scotland will be able to join the CMCU, with the intention of widening the membership in due course.
“Many of the most successful credit unions are, or were originally, employment based, and CMCU will ensure that many people in the community will have first-hand experience of a credit union and be able to pass the word on about the services they can provide.”
The Church of Scotland established a high-powered Commission on the Purposes of Economic Activity in 2010 to look into what had gone wrong with our economic system and to suggest how it might be improved.
It set as its principal task to establish how the Church could “best offer Scottish society a new vision of what might be achievable in the economic, social and community life of the nation.
The credit union movement was identified as being able to help deliver an ethical approach to finance.
Mr Chalmers added: “In collaboration with its partner churches, the Church of Scotland is working in the most practical and appropriate ways for the common good of society.
“It is through the development and support of new, co-operative and mutual projects like this that society can offer more in the way of financial inclusion.
“A new player in the marketplace will help to influence the financial services industry, and to put first the needs and consideration of all.
“The Church is perhaps uniquely placed as having a publicly accessible facility in every community in the country. Thus, in addition to helping to develop the CMCU, we have been encouraging congregations to form partnerships with their local credit unions, in order, for example, to allow the credit union to use the church hall as a ‘branch office’, perhaps on a weekly or monthly basis. This has allowed more people to access the services that credit unions offer, and has also raised the profile of the credit unions- resulting in more people joining.”
The CMCU was given formal authorisation by the regulatory authorities in December, after a rigorous process undertaken by the Financial Conduct Authority and the Prudential Regulation Authority. The Financial Services Compensation Scheme covers deposits up to £85,000.