FAQ

"H&F Credit Union"

What are Credit Unions?

A credit union is a community based financial co-operative whose members share a common bond (for example, one of association, residence of place, or employment). In the case of H&F Credit Union, the ‘common bond’ is that all members must live and/or work in the borough of Hammersmith and Fulham. Credit Unions are not for profit organisations, set up, owned and managed by its members.

The main purpose of establishing a credit union is for members to pool resources (money) to provide affordable credit and loan facilities to members. Credit Unions also promote a savings culture amongst its members, as money given out as loans is the money saved by members (referred to as shares).

What makes Credit Unions different?

Credit Unions differ from other financial institutions in many important aspects, such as:

• Being governed democratically by its members through a Board of Directors elected by the members from within the membership.
• Granting equal rights to all members – credit unions operate on the principle of one member one vote.
• Being part of a well-established co-operative movement, with national and international experience of providing financial services.
• Offering individuals control over their finances and encourage self-sufficiency among members
• Always putting the interests of members first, rather than the interests of external or third parties.
• Being subject to stringent regulation by the Financial Services Authority (FSA) in the same way as banks and building societies.
• Having legal limits on the interest rates they can charge on a loan (currently 2%).
• Giving local people the opportunity to invest their savings ethically for the economic and social benefit of their community.

Who runs the Credit Union?

The Credit Union is run for its members and by its members. A board of directors is elected from within the membership of the Credit Union. This usually takes place at an Annual General Meeting open to all members of the Credit Union. Elections are held on a one-member, one-vote principle, regardless of share size. The Credit Union is audited by independent certified auditors and monitored by the FSA.

What benefits will the Credit Union bring to Hammersmith and Fulham?

Although the average gross income for Hammersmith and Fulham is £35,400 (mean), and approximately 50% of households have a gross annual income of over £19,300 (median), there is a growing level of disparity between those with money and those at risk of financial exclusion.

Many people in Hammersmith and Fulham experience high levels of poverty and financial exclusion. Statistics indicate that 14.3% of households in the borough have a gross annual income of under £5,000. A further 16% of households have a gross annual income of between £5,000 and £9,999, whilst 11.8% of households’ income ranges from £10,000 to £14,999. In addition almost 30% of children in Hammersmith and Fulham are living in families on key benefits.

A key aim of the Credit Union is to empower these people by providing affordable and accessible loans, offering financial advice and encouraging savings and thrift. Establishing a Credit Union in the borough will also provide an opportunity for people to save their money locally and ethically for the benefit of the wider community.

How can I be involved?

H&F Credit Union requires significant funding during its early years and many leading organisations in the borough such as the LB Hammersmith & Fulham, the NDC and housing associations such as Notting Hill Housing, Southern Housing Group and the Guinness Trust have made generous donations to date.

Organisations can also contribute by setting facilitating a savings deduction scheme for staff and by encouraging local residents to join H&F Credit Union. Organisations can also offer in kind contributions by offering expertise and services free of charge.

Individuals wishing to become involved in H&F Credit Union can become volunteers, champions or perhaps future Board Members, particularly those with experience in financial services. Volunteers can be involved in a variety of activities ranging from leaflet distribution through to becoming part of the voluntary staff of H&F Credit Union.

What others have said

“The opportunity to have a Credit Union in our Borough is a real step forward for everyone especially those on the margins. I am proud to be associated with establishing our own local H&F Credit Union because it will be a major player in tackling issues such as reducing deprivation and raising incomes by offering individuals access to fair credit and a safe place to keep their money. The creation of H&F Credit Union is a small step for our Borough but one which will make a huge difference to improving the quality of life for the many at the edges.“

– Bill Cox, Board Member, North Fulham New Deal for Communities

“As one of the largest social landlords in the borough, Notting Hill Housing recognises the many benefits the creation of a credit union will have for our tenants and our staff, as well as the wider community in Hammersmith and Fulham. The credit union will help tackle loan sharks and doorstep lenders, who exploit those at risk of financial exclusion by charging extortionate rates on small loans. We also hope to offer our staff the option of saving with the credit union through a payroll deduction scheme. This useful service would provide our staff with an ethical method of saving that contributes to the well being of the whole borough. We are proud to support the establishment of H&F Credit Union and look forward to working with them closely in achieving their aims.“

- Vincent Thomas, Head of Project Development, Notting Hill Housing Trust