What is a credit union?

Credit unions offer secure savings and low cost loans.

Credit unions are financial co-operatives, owned and run by and for the benefit of their members. They are authorised and regulated by the Financial Services Authority (www.fsa.gov.uk) – the same body that regulates banks and building societies. There are around 600 credit unions in the UK serving some 450,000 members.

Credit unions offer secure savings and low cost loans.

• The maximum amount of interest a credit union can charge under current law 26.8% APR (or 2% per month on the reducing balance). However many credit unions charge less than this.
• Members who save with the credit union are usually paid a dividend on their savings
• Members also benefit from free life insurance on their savings and loans.

Credit unions can offer a range of financial services including:

• junior savings accounts,
• savings accounts for special events (such as Christmas accounts),
• funeral expense plans and other insurance products .

Some credit unions may also provide accounts to accept benefit payments direct from the Department of Work and Pensions and Child Trust Funds for the investment of Government vouchers.

How do they work?

Credit unions work by using members' savings to create a pool of money from which loans can be provided to other members.

To be a member of a credit union you must share a 'common bond' with all the other members - for example, being employees of the same company or association. However, the most popular 'common bond' is through sharing a community - this is sometimes known as a 'live or work' common bond.

The trade association for credit unions in the UK is the Association of British Credit Unions Limited (ABCUL). For more information see the Association of British Credit Unions Limited website.

The York Credit Union

York Credit Union is open for business and having received authorisation from the FSA. Membership is open to anyone who lives or works within the City of York Council boundary.

YCU will initially operate from a series of Community Savings Points across the city and via direct deductions from salaries from local employers, who have signed up to the scheme.

For more information see the York Credit Union website.

Who is involved with York Credit Union?

York Credit Union is supported by many local organisations including ourselves, Joseph Rowntree Charitable Trust, local registered social landlords (housing associations), churches and other business and individual sponsors. It is controlled by a volunteer Board of Directors and relies heavily on a group of dedicated volunteers to provide member services.