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The Co-operative Party
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Great news from Liverpool, one of the first members of the Co-operative Councils Network, where the Council Leader and Labour’s candidate for Mayor Joe Anderson announced £1 million for a city-wide credit union to help people avoid using loan sharks.
In his Joe for Liverpool manifesto, Cllr Anderson pledges that “I will set up a city wide Credit Union to provide loans to hard pressed families who, because of a lack of credit, are forced to take out loans with extortionate interest rates.National banks have stopped lending to small businesses, so I will work with our Credit Unions to provide much needed loans to develop the local economy.”
Liverpool’s major investment in credit unions will be a welcome step forward for the movement. Alongside the strong co-operative policies in Labour manifestos for May’s elections we are seeing around the country, from Plymouth to Edinburgh, and the many Labour & Co-operative candidates standing, Labour Liverpool continues to be a beacon for co-operation.
Much more detail would be helpful. Is this a fund which the existing credit unions can draw on?
Is it money to cover the cost of a council run Credit union? Will they be encourarging people to save first for at least six months, attend a number of classes, on how to manage your money. Loans should then be for £50 to £ 100 max and only when people show they can pay it back, should they be loaned more.
The reason banks dont want to lend to many people and Loan ‘sharks’ charge so much, is that they are a very bad risk.
At a recent interview at a Credit Union’s loans committee, applicants were asked for utility bills, for proof of address and payments. The answer was we NEVER pay utility bills.
Traditional Credit Unions based on Co-operative principles of saving and prudence have always been successful. Credit unions based on Council or DWP support/control take massive subsidies. A local one has had £1 mill aid in ten years and still does not break even.
If the old money lenders act was restored, it would stop all loan sharks.
It was repealed by the Credit Act 1984.
Under the Money Lenders Act 1958 the maximum interest anyone could charge was 48% Per annum. They were also barred from charging any other fees, penalties etc.
That would be a nasty shock for the moneylenders /payday loans etc.
Also the impecunious would have to mend their ways or never get another loan.
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