Credit Unions:  Financial Support

Committee Business – in the Northern Ireland Assembly at 6:00 pm on 25 February 2014.

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Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin 6:00, 25 February 2014

The Business Committee has agreed to allow up to one hour and 30 minutes for the debate.  The proposer will have 10 minutes in which to propose the motion and 10 minutes in which to make a winding-up speech.  All other Members who are called to speak will have five minutes.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

I beg to move

That this Assembly acknowledges the valuable contribution of the credit union movement to providing affordable credit; and calls on the Minister of Enterprise, Trade and Investment to work with her Executive colleagues to provide appropriate financial assistance to Northern Ireland credit unions to cover start-up costs to enable those credit unions that want to expand their range of services to include current accounts, in order to enable more people to avail themselves of banking services, to fill the gap left by widespread bank closures and to make a greater difference to communities across Northern Ireland, especially the most vulnerable and those in rural areas.

Gabhaim buíochas leat, a Phríomh-LeasCheann Comhairle, as ucht an seans a thabhairt domh an rún seo a chur os comhair an Tionóil.  Thanks, Mr Principal Deputy Speaker, for the opportunity to propose the motion in the Assembly.  I declare an interest as a member of the credit union movement.

In February 2009, in the previous mandate, when the Committee for Enterprise, Trade and Investment published the report of its inquiry into the barriers to credit unions expanding their range of services, no one really thought that we would still be debating the very issue five years later.  I am pleased to report that, albeit slow, progress has been steady and that much work has been done to advance the matter. 

Credit unions are now regulated by the Financial Conduct Authority (FCA), with the appropriate legislation having been put through Westminster to enable that to happen.  At this week’s meeting, officials will brief the Committee on the Department’s policy proposals for the Credit Unions and Industrial and Provident Societies Bill, which will provide the legislation needed to implement many of the Committee’s recommendations.

(Mr Speaker in the Chair)

The whole process provides an excellent example of how devolution can work in action.  It can be a demonstration of how Committees make a real difference to the lives of ordinary people, but the benefits can be fully realised only if the one outstanding Committee recommendation is accepted.  The inquiry report stated:

"The changeover to the new regulatory regime and the expansion of credit union services will bring additional costs for credit unions relating both to the transition to the new regulatory regime and to the development of new services.  It is recommended that DETI and the FSA work with the credit union movement to fully identify staffing, training and technology & equipment costs and to agree with HM Treasury a package of financial support to assist credit unions in implementing changes."

Credit unions are in a unique position when it comes to financial services.  They are established by the community and for the community, are managed fairly and responsibly, and are run by local people who are primarily accountable to local people; namely, their members. 

Back in 2007, before the financial crisis, the banks would have bitten their arm off to give you a loan.  Just a few short years later, the story is completely different.  The banks have been ruthlessly recapitalising, seemingly without regard for the welfare or future of the people — their customers — at whose expense they have been trying to rectify the mistakes that they made, in order to protect their assets and their shareholders, and, of course, to pay exorbitant bonuses to the executives who largely got them into difficulties in the first place.

We live in a largely rural society , yet the banks fail to recognise or acknowledge that.  They have been closing branches in rural areas and deprived communities right across the North, depriving people of banking services, seemingly without regard for the loyal customers who have been with them for many years and through many generations.

As the banking crisis developed and more and more people got into financial difficulties, many through no fault of their own, the payday lenders were there to add to their misery with adverts of happy, smiling cartoon characters bouncing on trampolines, obviously delighted with the 4,000% annual percentage rate (APR) — yes, 4000% APR — interest rate that they had just been offered.  People need reliable banking services and many need affordable short-term credit, but there must be a better way.  Of course, there is, or there is at least the potential for a better way, and that is to give financial support to credit unions to enable them to do provide it.

The Irish League of Credit Unions, supported by the Ulster Federation of Credit Unions, briefed the Committee on their proposals to fill the gap caused by wholesale bank branch closures, especially in rural and deprived areas, by offering full current accounts and access to affordable credit to local people.  Credit unions are not like the banks though.  Your local credit union is not part of a multinational conglomerate or, indeed, a national or even regional group.  It is independent.  Your local credit union is not answerable to faceless executives in Spain, Scotland or Scandinavia.  It is answerable to its members in the local community.  Your local credit union does not exist to make profits.  All surpluses are returned to members or used to invest in new and improved services. 

Credit unions cannot speculate with members' money and cannot offer short-term loans at high interest rates.  Their interest rates are capped by law at a maximum of 1% per month.  Credit unions exist for the benefit of their members and the communities they serve.  They are there to help people to manage their money well and to contribute to social cohesion and financial well-being.  So, when the credit union movement asked if it could come and brief the Committee on how, with some financial assistance to cover start-up costs, it can widen their services and bring real benefits to the local community, the Committee naturally agreed.

The credit union movement is seeking around £860,000 per annum for five years to cover start-up costs for 75 credit unions to enable them to offer current accounts, debit cards, inward and outward payments, direct debits and standing orders.  Financial support is needed to access the technical infrastructure as well as business planning, training, staffing and IT security issues.  The proposals are outlined in more detail in papers issued to Committee members.  On the face of it, and following a briefing from the Irish League of Credit Unions, which was fully endorsed by the Ulster Federation of Credit Unions, the Committee considers the proposals to be a very reasonable and worthwhile proposition.

Credit unions have been here for well over 50 years.  Rarely, if ever, have they sought or received any form of support from the Executive or from government.  They employ well over 600 full-time and part-time staff who, of course, pay income tax.  A further 120 or more staff would be required to administer the current account system, adding well over 100 jobs to the economy.  Irish League of Credit Unions-affiliated credit unions paid around £3·75 million in corporation tax in 2012 and pay around £650,000 in rates annually.  Unlike their counterparts in Britain who can apply for discretionary rate relief, they are subject to the full amount.  Therefore, we can safely say that, over the past 50 years, credit unions have paid their dues, and we should consider favourably any proposal that will secure 600 jobs and create a further 120 jobs for the next 50 years and beyond.

Credit unions in Britain have used the financial inclusion growth fund there to enable them to build infrastructure and make loans to a value of £175 million to members.  That has enabled them to offer instant credit to new members, bringing thousands of financially excluded people under the umbrella of the credit union movement and, in many instances, out of the clutches of high-interest payday lenders and loan sharks.  The Westminster Government are investing £38 million in credit unions in Britain over three years from 2012 to modernise and upscale operations and expand credit union membership there.

Only 2% of people in Britain are members of credit unions, whereas membership here comprises around 34% of the adult population.

Investment in credit unions here can make a real, lasting and positive difference to people’s lives.

Of course, the Committee is not suggesting that the Minister jumps in, not immediately anyway, and writes a cheque to the credit unions for the full amount.  The Committee believes that the credit union movement puts forward a very reasonable case for funding, which is fully in line with the recommendation of the previous Committee’s inquiry.  More work will have to be done between the Department and the credit union movement to work out the detail of what is needed, what can be provided and how that can be achieved. 

We ask that the Minister and her officials sit down with the credit union movement to work out an appropriate package of financial support that she can bring to her Executive colleagues to enable credit unions to fill the gap caused by wholesale bank branch closures, especially in rural and deprived areas, and help credit unions to remove vulnerable people from the clutches of high-interest payday lenders and loan sharks.

Mr Speaker, thank you very much for affording the Committee the opportunity to present the motion to the Assembly.  I look forward to hearing contributions from other Members.

Photo of Gordon Dunne Gordon Dunne DUP 6:15, 25 February 2014

I also welcome the opportunity to speak on the issue.  As a member of the Enterprise, Trade and Investment Committee, I recognise the valuable role that credit unions play in providing financial assistance to people in need right across Northern Ireland.  I apologise for the Minister, who will be with us shortly.  She is detained on urgent business.

The success and significance of the service that credit unions provide here is backed up by the statistics:  34% of our population hold a credit union account, compared with around 5% in the rest of the UK, and membership has doubled in the past decade. 

I commend the work of the Ulster Federation of Credit Unions and the Irish League of Credit Unions in supporting and developing their services.  Many of those who work in credit unions do so voluntarily and make a valuable contribution to the community in which they live.  Credit unions are, rightly, run on the principle that, if you cannot afford to save regularly, you cannot afford to borrow.  Saving is a basic skill that many lack today and, hence, they get themselves into financial trouble. 

A key factor in the credit unions' success is that they are locally based, working with and for local people in local communities.  Credit unions are locally focused and run for the good of their members and according to a social mission rather than for profit.  That is in strong contrast to the payday loan companies, which often exploit the most financially vulnerable and often have greater resources and use attractive advertising to lure people into unrealistic agreements. 

The Committee is aware of the ongoing work between the Department and the credit union movement, particularly on updating legislation that will offer better protection for users and make the credit unions more effective. 

There is no doubt that many people need financial support to cope with the ever-increasing cost of living, including food and energy bills.  We need to ensure that practical support structures such as credit unions are in place to provide the tools that they require.  Credit unions also operate in a genuinely cooperative way — I believe that there is room for greater cooperation between Departments, particularly given the current financial situation.

Recent bank closures have given a greater emphasis to the need for an effective credit union infrastructure, especially in rural areas.  Many people still like a physical drop-in facility in their local town or village, where they meet local staff whom they know and trust. 

We recognise that credit union branches need to modernise and become more customer-focused.  To provide a modern banking service, they need an IT-based system that allows them to offer current accounts and services such as bank cards and electronic banking.  The necessary improvements are costly and will require significant investment to make credit unions competitive in the modern financial market. 

There is no doubt that the credit union movement provides an excellent service to many across Northern Ireland.  All options should be considered to ensure that it can continue to evolve and operate effectively in the 21st century to compete with the other banks on the high street.  I support the motion.

Photo of Mickey Brady Mickey Brady Sinn Féin

Go raibh maith agat, a Cheann Comhairle.  I, too, initially declare an interest as a member of my local credit union in Newry.

The credit union movement is not simply a financial institution, lender or service provider.  It is very much an integral part of every community that we represent.  It is a grass-roots movement that is community-led and is exactly the kind of institution that we should be proud to support.

Credit unions were a response by civic-minded people to meet the needs of those sections of society that most needed support.  It remains so today.  The people who gave life to the credit union movement recognised that the root of many of these problems lay in the scarce availability and poor management of money.  In response, they were determined to create an institution that would give people, particularly those with the least power and fewest resources, more control over their finances.

What is particularly true in times of hardship and challenge is that the credit union movement is always there.  When it comes to Christmas — and September, when children return to school — the credit union movement supports countless families.  At a time when the standing of banks has fallen to an all-time low, the reputation of credit unions with local people is at unparalleled levels.

What started as a small initiative by people who had the national interest at heart has turned into a national movement with over half a million members and 168 branches serving communities and employing 750 people across the North.  Research commissioned by the Irish League of Credit Unions showed that 45% of 18- to 24-year-olds in the North were members of a credit union.  We have seen the devastating effect that payday loan companies can have on those in desperate need, especially students.  Credit unions, if supported properly, could provide a credible alternative.

In these times of increased unemployment and costs and reduced earnings, the need for credit unions has never been greater or more urgent.  Critically, credit unions often provide a service in areas and to people where other financial providers have chosen not to, particularly in rural and disadvantaged communities.  The services provided by the credit union movement make a real and important difference to people and communities.

We have seen the damage done by financial institutions driven by greed — institutions that reward sharp practices and unethical lending.  Credit unions have the potential to fill the gap caused by wholesale bank closures across the North, especially in rural areas such as my own, by offering full current accounts to local people.  Fifty-three bank branches have closed in the North in the past two years alone.  We are all too aware of the impact that such closures have on our communities.

There are already several towns and villages that no longer have a bank branch.  As banks withdraw, people, especially those in rural areas, are left having to travel long distances to a branch.  The most vulnerable — for example older people, those with disabilities and the less well off — are becoming, to all intents and purposes, deprived of a banking service altogether.

If credit unions are to continue to grow and service their members and communities, they must be able to offer a wide range of services, including current accounts.  As in many instances, Newry has led the way on many of these issues.  Newry Credit Union —  my local credit union — was the first in the North, and indeed across Ireland, to offer its members a current account service.  Its members can access an automated teller machine (ATM) and use a Visa debit facility to access cash and use the card in-store and online.

In Newry, the ability to access that important service is valued.  Citizens across the North should have access to a similar standard of service.  We can help to make that happen by providing financial support to those credit unions that wish to offer that vital facility to assist them with the start-up costs.

Supporting the credit union movement may be a concern for a number of Departments:  DSD and OFMDFM in terms of financial inclusion, and DARD, particularly in relation to rural economic development, which is so important, especially in border areas like Newry and Armagh, which suffer, and have historically suffered, higher levels of deprivation and lower levels of investment.

Drawing on the experience from my local area, I support the motion and any actions following from it that would allow other communities access to the services that those served by Newry Credit Union enjoy.  The motion has the full support of our Members in the Assembly.

Photo of Sandra Overend Sandra Overend UUP

Thank you very much, Mr Speaker, and thank you for the opportunity to speak on this motion, which has been brought by the Enterprise, Trade and Investment Committee. 

As has been said, just over one third of people in Northern Ireland use credit union facilities.  They are community-based financial institutions set up by the public with a community-led ethos.  Credit unions act as an introduction to the financial sector for many people and offer an affordable and easily accessible service to the community.  They encourage small-scale savings plans, which help to promote saving money to people who otherwise might not actively save.  They also act as an introductory savings scheme for many children and young people throughout Northern Ireland, encouraging saving from an early age.  Indeed, my own three children have accounts in our local credit union.

Credit unions fill many gaps in the financial sector, especially for people in rural areas who have seen many bank closures in small towns and villages.  In the credit union, people have a local, viable and reliable option.  They are also important sources of credit for many who otherwise would be unable to secure credit from major lenders and would be forced to turn to the short-term loan companies and their usurious interest rates, which have had a damaging effect on many individuals and families and the risks of which have been debated at length.

However, the services that the credit union can provide are limited here in Northern Ireland.  This motion has been proposed so that we can begin to address the limits to credit unions, assess where expansion is viable and offer our support to expanding their services.  In Great Britain, the coalition Government have pledged financial support to the tune of £38 million over the next three years to help to extend the services of many credit unions there, with the Scottish and Welsh Governments investing £1·3 million and £1·2 million respectively in credit unions.  The Minister at the Department for Work and Pensions stated:

"if credit unions are ready for the challenge of modernisation and expansion we are willing to support them."

Here, too, if credit unions are ready for the challenge, we hope that government is ready to support them.  I call for that support to be forthcoming.

The calls from bodies representing credit unions in Northern Ireland for funding to help to expand to provide services, such as current accounts and enhanced saving options, point to the desire for growth.  I support that fully.  Many credit unions find themselves limited in the scope of what they can offer to customers who, increasingly, want their financial services providers to offer more and more advanced facilities.  Furthermore, with one third of people in Northern Ireland using credit union services compared with 5% across the rest of the UK, we are in a much better position to assist a greater proportion of people in the community.

That having been said, it is important that the right branches are targeted and that funding is apportioned in a fair and equitable manner.  Should funding be secured, it is important to ensure that a fair proportion of credit unions across Northern Ireland are given the assistance to expand.  I thank Mr McCrory of the Irish League of Credit Unions for his assurances during his submission to the Committee that this development is for all credit unions, irrespective of which trade body they may be affiliated to and without fear or favour.  Where investment is made, it needs to be done across Northern Ireland so that as many communities as possible can benefit from the improvement in services.

 

It is also important to note that only a limited number of credit unions will be in a position to expand their facilities and open up new services.  In its submission to the Committee, the Irish League of Credit Unions explained that around 20 of its credit unions would be in a position to extend services beyond what they have.  Similarly, in discussions with the Ulster Federation of Credit Unions, I was informed that it has fewer that would be in a position to expand.  There are a number of reasons for that, with funding and staffing restrictions the main barriers to growth.

It is important that any plans for expansion take into consideration the views and needs of the communities where the credit unions are located and of the credit union branches.  Credit unions, as community-led organisations, are highly distinct and have various specific methods that cater to their individual clients.  It is important that any proposed changes are fully developed through engagement and with the community in mind.  I support the motion.

Photo of Trevor Lunn Trevor Lunn Alliance

I support the motion and hope that a way can be found to provide the necessary finance.  Not being a member of the Committee, I have not been privy to all its discussions, but I have been heavily lobbied about this matter by the Irish League of Credit Unions and the Ulster Federation of Credit Unions.  It is very clear that many credit unions are of a mind to expand their range of services and that the only thing holding them back is the start-up costs.

The figure quoted of around £850,000 per annum for five years is a lot of money, but, in overall terms, it is not that much.  Allowing the credit union movement to offer current accounts and card services has the potential to benefit a section of society that, for years, has felt let down and abandoned by the major banks.  Those same banks have been roundly criticised in this House and beyond for their failures.  We now have the opportunity to provide a small amount of assistance to allow credit unions that want to fill the gap to do so.  That is very timely, as the banks' policy of branch closure and tightening of credit, particularly of smaller credit, continues.

I must sound a note of caution in my support for the motion.  The credit union movement, from its inception in Northern Ireland in 1960, has been a success story.  It has stayed true to its roots, been careful not to overreach itself, and is largely built on trust and loyalty from and towards its customers.  As banks, big and small, have run into difficulty, the credit unions, by financial prudence and strict adherence to their own rule book, have grown and prospered.  We all heard the figures today:  credit unions have 34% penetration in Northern Ireland, as against 2% in the UK.  I am told by a German friend that there is an even higher proportion of penetration in Germany by a very similar movement, which has had current accounts for quite a long time. 

The UK has produced the financial inclusion growth fund.  I must say that it is the most beautifully described fund that I have come across.  Normally, such funds are called something daft; but this really is about financial inclusion and growth, so it is perfectly named.  Now is clearly the time for a major step forward by the movement, but the need for control and prudence will be even greater, because it is moving into an area of higher risk, which the banks have deserted.  Banks do not run down part of their business without reason.  They evidently do not regard it as profitable or worthwhile any more to encourage small current accounts or small lending.  That is the challenge for credit unions:  to succeed in an area where large and — let us face it — experienced operations have failed or chosen no longer to complete. 

Having said that, I have absolutely no doubt that the credit union movement can handle this expansion.  I believe that the traditions and ethics of credit unions and the closeness and loyalty generated with their customers will be enough for this venture to succeed; and I hope that the Executive can come up with an acceptable level of support to make it a reality and bring back the concept of local banking to those who need it.  I would not call this an experiment; it appears to be a five-year plan with five-year funding.  That is what the credit unions are looking for, and that would allow up to 75 credit unions.  So, they will gain experience over that five years, and who knows where the movement might go next?  I certainly wish the credit unions well as they continue their good work for local communities, and I look forward to the Minister's response.  I confirm our support for the motion.

Photo of Sydney Anderson Sydney Anderson DUP 6:30, 25 February 2014

I rise as a member of the Enterprise, Trade and Investment Committee to speak on this Committee motion.  It begins by acknowledging the very real contribution made by credit unions in Northern Ireland.  Indeed, they have been an integral part of the financial fabric of society here for many years and have made a large contribution to the economy.  As has been mentioned by Members, historically, credit unions have a much higher membership in Northern Ireland than in the rest of the United Kingdom.  They now operate right across our communities. 

The role of credit unions has become even more important in recent times since the banking crisis of 2008.  That crisis has had a profound and probably lasting impact on the financial infrastructure of much of the Western World.  For me, and other public representatives, hardly a day goes past when we do not hear from our constituents about problems that they are having with their bankers.  That is a subject in itself for debate.  The point is that credit unions and similar bodies can go some way to filling the gap left by the banks and help people in a variety of ways and through a range of financial services. 

The motion refers to the most vulnerable members of society and those in rural areas.  I represent a largely rural constituency, and I am all too aware of the sort of impact that bank closures can have.  I am also well aware that there are plenty of loan sharks and people offering payday loans who are busily seeking victims each and every day.  The whole area is now subject to reform.  Recent reforms undertaken by the Department have allowed credit unions to expand the range of services that they offer, which is something that we must warmly welcome. 

The Minister has also rightly and repeatedly stressed that credit unions must operate within strictly defined limits, and we have learned some hard lessons in that area in recent years.  Credit unions across the United Kingdom are now registered by Westminster but continue to be regulated here by DETI.  As a result of reforms a year or so ago, members' savings are now covered by the financial services compensation scheme and members have access to the Financial Ombudsman Service

 

I would also like to acknowledge the changing and expanding role of post offices, which I believe have a similar role to play, especially in rural communities.  The Post Office is a well-established organisation and is also well placed to develop a range of services.  I know post offices in my constituency that are going through change and offering services that were traditionally offered by banks such as withdrawals, deposits and payments.  Those facilities will become available to them.  Those expanded facilities, which are so valuable, especially in rural communities, as I said, are the types of services that we want to encourage in our small towns and villages across Northern Ireland.  Whoever is in the best position to provide them, be it the Post Office or, indeed, credit unions, people want the best possible service provision. 

The Minister told the House last week that she had had discussions with post offices, and I encourage her to continue with those discussions.  The motion also refers to the desirability of being able to provide credit unions with help with their start-up costs.  I know that both the Ulster Federation of Credit Unions and the Irish League of Credit Unions, who recently provided evidence to the Committee, are keen that credit unions should be given financial help to enable them to develop the quality and range of services that they can offer to their members, such as current accounts.  To do so will require capital investment in staff and technology. 

 

Those are all issues that need to be looked at carefully and further explored to see how we can best proceed.  The bottom line is that people need to have access to as wide a range of reliable and well-regulated financial services as possible.  I await further developments with interest.

Photo of Fearghal McKinney Fearghal McKinney Social Democratic and Labour Party

I rise as a member of the Enterprise, Trade and Investment Committee.  After all that I have heard, I now declare an interest in joining the credit union.  We have an exceptionally strong credit union movement here.  If I turn the 34% figure into a number, it represents 400,000 members.  That is a significant proportion of the population. 

Of course, the aims of the credit union movement are close to the hearts of SDLP members, existing only to serve their members and not profit from members' needs.  It is a practice as necessary now as when Ireland's greatest, John Hume, assisted in founding the Irish credit union movement and the Northern Irish credit union.  However, times change, and, given the increased need, it is imperative that this important work is able to continue to allow credit unions to compete in today's market. 

In 2012, my colleague Mark Durkan fought hard for credit unions during the debate on the Financial Services Act in Westminster in order to ensure that they could build on their potential, because, perversely, while our credit unions have a much stronger base than Britain's 2%, they are historically much more restricted in the services that they can offer.  The effort that was invested in that process was another demonstration of the situation that Northern Ireland finds itself in vis-à-vis these institutions, as both the major management decisions of the banks and the legislative requirements imposed on them are made elsewhere.  Of course, the credit union management is based here and focused on the needs of local members, but the lack of interest from London in taking decisions to aid credit unions and savers in Northern Ireland is palpable. 

 

Credit unions have a hugely important role to play, as we have heard, especially at this time of recession, in providing people with a safe place to save their money and the ability to access affordable credit as a safe alternative to loan sharks and payday loan companies.  I urge any of you, and I think that my colleague Mr McGlone outlined this, to freeze-frame your television when one of those adverts comes on and look at the interest figure:  it is something around 4,000%.

That is, in my view, tantamount to usury.  Perhaps we cannot do much about that, but we can do more by promoting credit unions as best we can.

Credit unions could also play a part in filling the gap caused by bank branches closing across much of the North.  It is happening everywhere.  Three banks are closing in the area round my office in south Belfast.  You do not have to go very far around the North to see a bank closure.  However, credit unions can help to close such gaps only if they are enabled.

In Great Britain, the Government have provided the funding that we have been hearing about to help to offset the high start-up costs of operating current accounts and the ongoing costs of maintaining them.  Frustratingly, however, the London Government claim the reason for excluding Northern Ireland from that funding scheme is that our local credit unions are well established.  It is, in effect, punishing the people of the North for the self-help that they administered at a time when little help was forthcoming from elsewhere.  That was from a party whose big society stated aims are to encourage people to take an active role in their communities, support co-ops, mutuals, charities and social enterprises.  Without that support, it is even more important that we bring forward bespoke support for credit unions in the North.

In May 2012, it was the Minister's stated aim to grant similar freedoms to Northern Ireland credit unions to allow them to continue and build on their existing valuable role.  The opportunity to provide additional mainstream savings products would make credit unions more competitive in the financial marketplace and enable them to reach a wider audience, especially at a time when major banks are walking off the pitch.  Therefore, I also look forward to the introduction of the credit union Bill, which the Minister promised for the 2013-14 session.  The SDLP has a wealth of experience serving credit unions and their members and will have an active part to play in scrutinising such legislation to ensure the best possible outcome for savers and borrowers in Northern Ireland.

Photo of Sammy Douglas Sammy Douglas DUP

I rise as a member of the Enterprise Committee to support the motion.  I also declare an interest, because I have a Dundonald Credit Union T-shirt. [Laughter.] The large network of credit unions, spearheaded by the Irish League of Credit Unions and the Ulster Federation of Credit Unions, is testimony to the great voluntary work that goes on across Northern Ireland.  That large network of credit unions is the envy of other jurisdictions, and this debate presents a unique opportunity for the Assembly and the Executive.  I do not think that it is an issue for the Department of Enterprise, Trade and Investment alone; a cross-departmental response is required.

Over the years, my experience has been with the Ulster Federation of Credit Unions, which has done a tremendous job since 1995.  It has over 50 members and started from a very low base.  I record my appreciation for the work of credit unions across Northern Ireland, particularly in communities that are most in need.  Forty-two credit unions, for example, operate in the 12 highest-ranked wards in the index of multiple deprivation for Northern Ireland.  That is no coincidence, with the overwhelming need for access to affordable credit being driven by those communities.  There is a need, a demand and support for credit unions in those communities.

All Members see in their offices that many families across Northern Ireland are struggling to make ends meet.  According to credit union research, many households are at crisis point.  Families are struggling to pay bills and, as was said, are falling victim to moneylenders and illegal loan sharks, who are the scourge of society.

At the end of 2012, a credit union tracker survey focused on high-cost credit.  Its findings showed that moneylenders proved to be unrelenting predators on people who were struggling financially, with those admitting to borrowing in that way rising to 6% of all Northern Ireland consumers.  What an indictment.

In March 2010, the Enterprise Committee noted the disparity between what credit unions in Great Britain and in Northern Ireland can do, and it considered a number of options for reducing the gap in flexibilities.  The Committee rejected the option of maintaining the status quo and recommended that Northern Ireland credit unions be permitted to expand their range of services to include, at the very least, those services that credit unions in Great Britain can currently offer.

When the growth fund — the modernisation fund for credit unions in Great Britain — was started, credit unions in Northern Ireland were not regulated by the Financial Services Authority (FSA).  When we look at the level of support provided in the rest of the UK, we find that several dedicated funding streams exist to assist the expansion of the movement.  In 2012, it was announced at Westminster that the Government would take forward the findings of a credit union expansion feasibility study.  The Department for Work and Pensions would invest something like £38 million in credit unions until March 2015.  That fund and others apply to credit unions in England, Scotland and Wales but not Northern Ireland.

Photo of Fearghal McKinney Fearghal McKinney Social Democratic and Labour Party

Does the Member accept that, in total, between income tax, corporation tax and property tax, the credit union movement here contributes something just shy of £7 million to the annual tax pot?

Photo of William Hay William Hay Speaker

The Member will have a minute added on to his time.

Photo of Sammy Douglas Sammy Douglas DUP

I thank the Member for his intervention. I agree with him:  there is no doubt that that is good value for money, given the work that credit unions do across Northern Ireland.

As I said, those funds applied to credit unions in England, Scotland and Wales but not in Northern Ireland.  That has nothing to do with the Barnett formula or the block grant.  It is about the British Government giving England, Scotland and Wales help and support.  We all know what happened in Scotland, where credit unions received a total of £1·3 million from the Scottish Government's third sector enterprise fund.  That investment will help credit unions to upgrade their facilities, extend their services to a wider range of people, and continue to expand and develop as thriving social enterprises.  That is exactly what our Northern Ireland credit unions aspire to.

The Welsh Government recently announced funding of over £1·2 million.  Another example of financial support provided in the rest of the UK is support for rates.  GB credit unions can apply for discretionary rate relief from their local authority.  That compares with credit unions in Northern Ireland, which are liable for the full amount.

The motion calls for financial support to expand credit unions' services.  I believe that it is also about fairness and equality and about credit unions being treated like their counterparts in the rest of the United Kingdom.  It is important that credit unions in Northern Ireland be supported by the Executive in their attempts to fill the void left by bank branch closures, particularly in rural areas, and in their continuing fight against payday lenders.  I agree that the Assembly and the Executive should make every effort to ensure that credit unions in Northern Ireland are not disadvantaged but are given the same assistance as the credit unions in the rest of the United Kingdom to develop their services.

Photo of John Dallat John Dallat Social Democratic and Labour Party

At the outset, I acknowledge the presence of the Minister and her officials, which is an indication of how seriously she takes the subject.  She has been consistent all along, of which I will say more later.  I have no doubt that the people from the credit unions who are present in the Public Gallery will also appreciate the presence of the Minister to hear the debate.

The main thrust of the motion is to provide financial assistance to enable credit unions to develop their current accounts.  I want to develop another reason that the Assembly should act, and not in the long term but immediately.  Credit unions in Northern Ireland have more than £1 billion in assets but less than half of those investments are out in loans to members.  That is not a criticism of the credit unions.  At the same time, it puzzles me that loan sharks, payday lenders and others who charge exorbitant interest rates are operating in the same parishes, villages and towns, ripping off the most disadvantaged people, who can least afford to pay rip-off loan charges.

Why is that?  Why are so many people ignoring the very competitive 1% a month charge by credit unions and allowing themselves to be exploited by those who charge, as we heard earlier, 4,000% and more, with no insurance protection and no loan interest rebate?  I was a director of a credit union for more than 30 years, and those were the best years of my life.  In fact, I had no other hobby.  I cannot be certain of the answer, but I feel strongly that, if credit unions had the capacity to operate current accounts, they would instantly be more attractive to the thousands of people who have yet to discover the advantage of being members of credit unions.

The Department of Enterprise, Trade and Investment can be very proud of its history of involvement with the credit union movement.  If only those overseeing the banks had been so meticulous, we would not have had the financial mess that caused so much misery to so many people.  From past experience, I want to put on record my personal thanks to the officials who worked tirelessly with credit unions for many years to ensure that they were run properly.  They did it in such a way that credit unions did not feel threatened but were encouraged to become the best.  I know that when responsibility passed to the Financial Services Authority there was a great sense of loss, but, today, that gap can be filled again by the Minister, who, as I said, has an excellent understanding of credit unions and, I believe, a genuine commitment to the movement.

No organisation can stand still; if it does, it stagnates and begins to decline.  Credit unions are part of the cooperative movement and are too precious to allow that to happen.  Given the experience and goodwill that exists between the credit unions, the Minister and her Department, the time is surely right to create a renaissance for this wonderful movement, which, as we were told earlier, began in Germany.  It is interesting that it started with two Protestant clergymen who recognised the poverty of their flock.  In the first place, it spread to Ireland and was promoted by the Catholic Church, but now, of course, credit unions are enjoyed by everyone.  I should not even mention religion.

Today, financial institutions operating at arm's length will go to any length to sell loans but at a dreadful price.  The credit union, as we are told, is a not-for-profit organisation.  It does not exploit people, but, for whatever reason, has less than half of its money out on loans to members.  The motion identifies what I believe are some of the reasons for that, and I ask the Minister and the Department to take the bold step of investing resources in credit unions that want to move to the next stage of their development so that their appeal will be to many more people, including those who are currently being exploited by loan sharks.

As mentioned earlier, the first phase of the credit union movement was when my former party leader, John Hume, travelled the length and breadth of Ireland to build up credit unions at a time when banks would not lend money.  Today, some of those financial institutions cannot lend enough, but, of course, the consequences are the same for the people who cannot afford it.  Mr Speaker, I am delighted to have taken part in the debate, and I look forward to success.  Earlier, we had paper bags and brandy balls, and now we have real action.

Photo of Steven Agnew Steven Agnew Green

I rise to speak on behalf of the Green Party of Northern Ireland, as a member of the Committee for Enterprise, Trade and Investment and, indeed, as chair of the all-party group on cooperatives and mutuals.  I also declare an interest as a member of Bangor Credit Union.

Where banks are rationalising their on-street retail away from many rural areas, deprived areas and even some town centres, credit unions are very much at the heart of the community and part of the community.  When you speak last in a debate, it is often difficult to say anything new, and I thought that I had one piece until Mr Douglas spoke.  The fact that we have 42 credit unions in our 12 highest areas of multiple deprivation is testament to the ethos of credit unions.  They are not-for-profit organisations and are there to serve the community and provide a service to it.  As I said, they are there to be part of the community.

The challenge we face as a society from the loss of many retail banks from our high streets and our rural areas is an opportunity for credit unions to expand their services.  It is also a challenge to them, no doubt.  As mentioned, the start-up cost is estimated to be around £70,000.  I assume that that is for quite reasonable things such as upgrading IT facilities and systems and reskilling staff.

The model, which is a very responsible one, has a very low rate of interest, 1%, and a very low-risk portfolio of investments.  That contrasts with our high street banks and the irresponsible lending that we have seen in recent years and, I do not doubt, will see again because I am not convinced that we necessarily learned the lessons of liberal credit.  I expect the banks to rebuild and go down that line again. 

So we should commend the model of credit unions, but it is that model that restricts their ability to invest in upgrades.  Therefore, we should recognise at government level that they provide a valuable service and offer support, particularly given that we are asking them to fill the gap left by high street banks and, indeed, as many pointed out, to be part of the solution to the problem of payday lenders.  A legislative solution may or may not be found at Westminster, but we cannot hope for that.  We have to educate consumers and support credit unions in offering an affordable alternative to extortionate credit.

Financial capability is a big issue in Northern Ireland.  The Minister and her Department, along with other Departments, are working with the likes of the Consumer Council, Advice NI and Citizens Advice to look at how we can better educate our communities on financial capability.  As part of that, we have to look at how we can increase the very laudable rate of 34% membership of credit unions in Northern Ireland.

I ask the Minister to work with her Executive colleagues, as the motion suggests, to provide the assistance that credit unions need to meet the challenge on behalf of their members and wider society.  The money required was mentioned:  as a proportion of departmental spend, that is not vast; it is the sort of money that might be looked at during monitoring rounds and suchlike.  I ask the Minister to act as soon as she can.  As mentioned, she has been supportive of the credit union movement.  I welcome the consensus achieved on the motion today.

Photo of Arlene Foster Arlene Foster DUP

First, I apologise for not being in the Chamber at the start of the debate.  I told the Business Office that I would not be available later this evening, but I managed to get out of a commitment as I wanted to be here for the debate.  I apologise to the Chair of the Committee and others who spoke before I arrived.  However, I listened with interest to the rest of the contributions and join Members in acknowledging the valuable contribution of the credit union movement in providing affordable credit. 

I listened with some interest to Mr Dallat talking about the origins of the credit union movement.  I asked colleagues sitting behind me whether the founders were two Anglican ministers in Germany.  They were not too sure, but I think that they probably were.  In any event, we know that the credit union movement goes right across Northern Ireland, regardless of religion or, indeed, any political affiliation.  It is long established and soundly based.  It developed rapidly during the 1960s and early 1970s when credit was less readily available, and it met an expanding social need for affordable borrowing among those who might otherwise have been financially excluded.  Often, the location of the first credit union in a particular area was a response to local problems of deprivation, debt or, indeed, financial exploitation or as a way to meet a need not met by the existing local financial infrastructure.

I listened carefully when a number of Members talked about payday lenders and loan sharks.  Unfortunately, the reality is that some payday lenders are operating where credit unions are located.  That is a matter of grave concern, and one wonders why it would be the case.  Why would members of a community that has access to a credit union feel the need to go to a pay day lender or loan shark?  We are taking action on money management skills through, as I think Mr Agnew mentioned, the financial capability strategy, which the Executive are involved in, to try to equip consumers with the appropriate information so that they can make informed choices about debt and manageable levels of debt.  We also continue to fund Advice NI to provide free debt advice through Debt Action NI.  I was very pleased to visit its premises recently to see the very good work going on in Advice NI.   

In an increasingly sophisticated financial sector, the basis and range of services that credit unions provide have developed and evolved, while still retaining their self-help ethos and position in the marketplace, where they are not and do not seek to be in direct competition with other financial institutions.  With 169 credit unions, many with sub-offices throughout Northern Ireland, no one is more than a few miles away from an affordable source of credit. 

Members will know, and it has been alluded to today, that the regulation of credit unions in Northern Ireland, in common with those elsewhere in the United Kingdom, is now the responsibility of the Financial Conduct Authority and the Prudential Regulation Authority.  The range and type of services to be introduced by Northern Ireland credit unions and an assessment of the ability of any particular credit union to provide those services is a matter for those organisations, acting as dual regulators. 

 

I think it is right and proper for Members to acknowledge the work carried out by my staff with credit unions over many years.  Some of them are in the Box today, and it is right that we acknowledge the work that they did. 

I am glad to be able to report that, while regulation is no longer the responsibility of my Department, the feedback from the movement is that Northern Ireland credit unions have adjusted well to not only the initial change of regulator to the Financial Services Authority but the successor dual regulatory regime operated by the FCA and the PRA.  Some challenges of course remain, irrespective of the regime.  Foremost among those is that of succession, or the shrinking pool of willing volunteers to serve as directors and other key officers of credit unions, particularly for those with smaller memberships or those located in more remote locations.  I know that the representative bodies are looking at that issue and that the Irish League of Credit Unions has successfully brokered the merger of a number of its affiliates.  While that means that the number of credit unions on the live register will be fewer, the membership of the Northern Ireland movement will remain by far the highest in the UK and one of the highest in the world.  Different percentages have been bandied about today in the Chamber.  My statistics are that in and around 40% of the Northern Ireland working-age population are members of a credit union.  The Department has long recognised that the movement is an integral and, more than that, important part of the social economy, and indeed contributes significantly to the wider economy through employment and competitive lending, and by engendering that very important self-help ethos in the community. 

There has been significant progress in reform of the credit union sector since the Enterprise, Trade and Investment Committee published its 2009 report on the role and potential of Northern Ireland credit unions.  The Committee’s report made a number of legislative and non-legislative recommendations.  Recent reforms undertaken by the Department have allowed our credit unions to expand the range of services that they offer, ensured that members’ savings are covered by the Financial Services Compensation Scheme and given members access to the Financial Ombudsman Service

 

It is essential that credit unions operate within the most appropriate legislative framework.  Following on from the reforms I have outlined, it is my intention to introduce a credit union Bill to update the legislation governing Northern Ireland credit unions later this year.  Work is well under way on that Bill.  It will grant credit unions greater scope to offer more operational flexibility and expand the scope of their activities.

A full consultation was undertaken last year.  The final policy proposals, based on the outcome of that consultation, are now subject to Committee and Executive approval.  As I said, the plan is to introduce the Bill in the current legislative session.

We continue to be the registration authority for credit unions in Northern Ireland until such time as that role also transfers to the PRA and the FCA.  It is important that a distinction is maintained between the Department's statutory role and the provision of financial assistance to the credit union movement.  Currently, we are not responsible for providing such financial support to the credit union movement.  Actually looking into the issue with regard to my legal power to make money available, I see that it may be a challenge given the role of other Departments, including DSD, in issues. 

I am aware that Department for Work and Pensions funding is being made available to address the particular needs and profile of the credit union movement in Great Britain, where only around 1% to 2% of the population has accessed the service of a credit union.  Of course, as I said, that is not the case here, where the figure is around 40%.  Earlier, I heard somebody refer to the big society.  I think that it is fair to say that we have been doing the big society since the 1960s.  The mainland is really only catching up in respect of the big society.  I made the point to the Secretary of State who was over here not so long that we in Northern Ireland really get the social economy and the whole ethos of self-help. 

The two main credit union trade bodies previously acknowledged that the movement in Northern Ireland is already highly developed.  Virtually all of the population of Northern Ireland meets the qualifying criteria for membership of one or more credit unions located throughout Northern Ireland.  The development of any new services, together with the associated investment, will be a commercial decision for the board of each credit union in response to demand from members. 

We are, of course, concerned about the issue of high-cost lending and access to basic banking services for consumers.  We hope that the draft financial capability strategy will deal with those issues, as I said earlier.  

I understand that the Irish League of Credit Unions met some of my Executive colleagues to discuss the role that the credit union can play in the context of developing more services.  I understand that that engagement has continued in recent months.  The proposal to provide current account and transactional services will obviously be of considerable interest in that context.

To conclude, I continue to give my support to the valuable work of the credit union movement in Northern Ireland.  I commend the innovation that has been shown in the proposal to pilot current account and transactional banking services in response to the impact of bank closures and, indeed, in some areas, post office closures.  Mr Anderson referred to the fact that post offices sometimes provide services for banks.  That is absolutely right, but sometimes there are neither post office nor banking services, so the credit unions are very important.

With regard to funding — I think that the point was made by the Chairman — I am not in a position today to provide the financial commitment that is sought in the motion.  However, when we receive and consider a fully developed business case to support the proposal and look at it across the Executive, that is something that we of course will look at and take into account along with issues such as state aid approval, which of course is always there in the background as well. 

I am very happy to support the credit union movement.

e

Hello every one please i quickly want to use this medium to shear a testimony on how God directed me to a real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $3,700 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains,then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Jose Velez who is the CEO FLOURISH FINANCE LOAN INVESTMENT So i applied for a loan sum of ($60,000.00) with low interest rate so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than four(4) days the loan was deposited into my bank account i thought it was a joke until i received a call from my bank that my account have been credited with $60,000.00 i became so happy that finally god have answered my prayers by directing me to a real loan lender who was able to grant my heart desires. big thanks to Mr Jose for making life reasonable for me so i am advising everybody who is interested in getting a loan to kindly contact him via email (flourishfinance01@yahoo.com) that was how i was able to get my loan, so i was able to pay off my bills. So thanks as you took out time to read about my success story and i pray god will also do his will in your life
I am Elizabeth by name.

Submitted by elizabeth john

Photo of Phil Flanagan Phil Flanagan Sinn Féin 7:00, 25 February 2014

Go raibh maith agat, a Cheann Comhairle.  At the outset, I declare an interest as a member of Tempo-Brookeborough Credit Union in Fermanagh, which, like many other credit unions across Ireland, is in the process of merging with a nearby credit union to respond to the challenges that face the sector. 

 

I very much welcome the opportunity to contribute to this very important debate.  I thank all Members for their contributions.  The provision of financial support to credit unions has the potential to bring large numbers of people who are currently unbanked and, therefore, financially excluded into the world of mainstream financial services.  That fits nicely into some of the work that the Minister and her Department are doing to improve people's financial capability.  Given the high and growing rates of credit union membership, this brings the opportunity to provide a change in culture to vulnerable and financially excluded communities.

I commend the Minister and agree with her sentiments about her officials, who have made considerable progress in improving the role that credit unions can play in our society and have undertaken considerable direct consultation with the credit union trade bodies.  I thank the Irish League of Credit Unions and the Ulster Federation of Credit Unions for their input into the debate and for coming to brief the Committee, as well as briefing me and the Chair in an informal meeting some time ago.

Large numbers of bank closures, especially in isolated rural communities — although, as Mr McKinney said, this issue is not isolated to rural communities — bring the potential to increase financial exclusion in those communities.  Allowing credit unions to fill that void can not only prevent that from happening but introduce to financial services more rural dwellers who are currently financially excluded.

I want to speak about some of the problems that we face with the banks.  There is behaviour going on in the banks that can only be described as disgraceful.  At present, they encourage as many people as possible to move to an online system of banking and then use that as an excuse to close rural branches and cut jobs.  They have outlandish charges for consumers who go into an overdraft without authorisation to pay direct debits. 

In my case, the Bank of Ireland charged me £168 this month for four failed direct debit payments.  I will also be subject to a fee of around £20 for each account by the companies trying to take that money, the total amount of which was less than £100.  By the way, a Cheann Comhairle, I still have to pay back the £100 as well.  So it charges you £21 for a request to go into an unauthorised overdraft, and then it charges you £21 when it turns down your request.  Those excessive charges are a disgrace and must be challenged. 

The OFT attempted to deal with that issue some years ago, but, unfortunately, the banks refused to budge.  That issue and the reluctance of high street banks to offer any kind of flexibility to customers through short-term loans and informal overdrafts has resulted in a surge in demand for super-high-interest legal payday loans. 

Credit unions were originally formed to address the needs of vulnerable people whose financial difficulties were being exploited for profit.  The first two credit unions in Ireland were based in Dublin, and the third was in Clones in County Monaghan.  As some Members said, the first credit union to open in the North was Derry Credit Union, which opened in 1960.  At that time, bank lending was limited to those with substantial collateral or guarantees.  That drove vulnerable people into the clutches of unscrupulous high-interest lenders — a situation that sounds very familiar today.  That is something that I am suffering from myself with a 50% APR credit card.  I am plugging for a pay rise from Sinn Féin, a Cheann Comhairle. [Laughter.] Credit unions are inherently a good thing.  A bit like nourishment in schools, which we debated last week, everybody agrees that they are a good thing.  It is a very good service.  It is provided for the community by the community within the community. 

Many vulnerable people do not trust mainstream financial services, but people trust credit unions.  Credit union members have high levels of satisfaction with their credit union services.  Where the banks look at a customer or a potential customer and see an opportunity for profit, credit unions look at a member or a potential member as a person in the community and see an opportunity to improve that person’s financial well-being.

Credit unions do not need these services to survive.  They have been surviving and growing very well for over fifty years without them, so seeking such services has no real inherent benefit for credit unions.  This is not about self-interest.  It is about the best way to serve communities.  That is what has driven credit unions since they were first founded.  Communities, and the individuals within communities, need credit unions to have those services now more than ever.  Supporting credit unions to widen their range of services will mean that many more people can become financially included in a supportive and trusted environment.  At a time when trust in banks and high-interest lenders is at an all-time low, a supportive and trusted environment is precisely what those people need.

Credit unions command the confidence of people in the local community.  I am struck, as I am sure that the Minister is, by the fact that, once a year, on International Credit Union Day, the 'Fermanagh Herald' and 'The Impartial Reporter' feature a large number of ads and testimonies from credit union customers paying tribute to their local credit union service.  I never cease to be amazed by the good work that goes on and by the dedication of the committed volunteers in the credit union structure locally, as members of subcommittees and governance structures and as members of either of the two trade bodies that represent all the credit unions here.

Credit unions have a very developed structure and are very well-run organisations.  The key purpose is about giving; it is not about taking.  People do not go into a credit union to help to run it for their own benefit; they do it to help the local community.  Information is kept confidential and people trust that, which is important.  Credit unions are very easy to access compared to high street banks.  Credit unions are willing to be flexible to meet the needs of an individual, and they are an essential part of the fabric of every community. 

This investment will allow credit union branches to offer a much greater range of services, including current accounts, direct debits, ATMs and credit cards, as well as the possibility of installing and maintaining cash machines in rural areas.  The investment will allow for the creation, not the promotion, of over 120 jobs, and that is a point that we touch on a lot in here.  We can help the credit unions to create over 120 jobs across the North, and that is not something that we should take lightly. 

Credit unions are full of highly skilled and highly trusted individuals who can help people, particularly the vulnerable, to obtain better financial capability skills and to manage their finances better.  That is well worth the investment.  It is not a particularly large sum of money with regard to the money that the Executive have to spend.  The Minister said that she may be constrained, but we are hopeful that she may be able to confirm that the Executive are not constrained and that funding can be provided from somewhere in the Executive if the Executive take that decision.  We are asking the Minister to work with her Executive colleagues to deliver in this regard.

In my final two and a half minutes, I will cover some of the points that Members raised.  Most Members spoke about the problems of bank closures and the wider problems of banks.  Gordon Dunne, Mickey Brady, Sandra Overend, Sydney Anderson and Fearghal McKinney spoke about bank closures and how that is increasing the need for credit unions with modern banking services.  Mickey Brady said that the credibility of banks is at an all-time low, and Sydney Anderson outlined the problems that many people were having with their banks. 

The benefits of credit unions have been a tenor through the debate.  Many Members recognised the valuable work of credit unions, the high level of membership, the trust that people have in credit unions, the local focus that credit unions have, their very positive ethos and the way in which they encourage people to save.  Sydney Anderson highlighted the fact that credit unions are an integral part of our community in helping and supporting local people.  Fearghal McKinney highlighted the fact that credit unions bring in around £7 million a year between various taxes and rates billsTrevor Lunn introduced a note of caution and highlighted the need for credit unions to stay true to their ethos if they were allowed to expand.  The Committee has developed a close working relationship with the credit union movement, and I am sure that all Committee members would agree that we have every confidence that they will stay true to their ethos. 

Sandra Overend, Fearghal McKinney, Gordon Dunn and Sammy Douglas focused on payday lenders and their use of aggressive advertising to attract vulnerable customers.  Sammy Douglas and John Dallat mentioned the scourge of illegal loan sharks and the misery that they bring to many communities.  John Dallat highlighted the need for urgent action to help people to get away from high-cost payday lenders.  Steven Agnew compared the actions of payday lenders with the low and affordable interest rates of credit unions.  Credit unions lend based on the ability to pay a loan back based on an historical ability to save — a point made by Gordon Dunn.  That is very different from the reckless actions of payday loan companies, which often throw out money without even doing a credit check or looking at an individual's ability to pay. 

Other Members spoke about the benefits of funding credit unions to fund those services.  However, the main point that I want to get across is that we fully support the motion, and we would like the Executive to provide some financial support to credit unions to allow them to provide those much needed additional services.

Question put and agreed to.

Resolved:

That this Assembly acknowledges the valuable contribution of the credit union movement to providing affordable credit; and calls on the Minister of Enterprise, Trade and Investment to work with her Executive colleagues to provide appropriate financial assistance to Northern Ireland credit unions to cover start-up costs to enable those credit unions that want to expand their range of services to include current accounts, in order to enable more people to avail themselves of banking services, to fill the gap left by widespread bank closures and to make a greater difference to communities across Northern Ireland, especially the most vulnerable and those in rural areas.

e

Hello every one please i quickly want to use this medium to shear a testimony on how God directed me to a real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $3,700 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains,then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Jose Velez who is the CEO FLOURISH FINANCE LOAN INVESTMENT So i applied for a loan sum of ($60,000.00) with low interest rate so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than four(4) days the loan was deposited into my bank account i thought it was a joke until i received a call from my bank that my account have been credited with $60,000.00 i became so happy that finally god have answered my prayers by directing me to a real loan lender who was able to grant my heart desires. big thanks to Mr Jose for making life reasonable for me so i am advising everybody who is interested in getting a loan to kindly contact him via email (flourishfinance01@yahoo.com) that was how i was able to get my loan, so i was able to pay off my bills. So thanks as you took out time to read about my success story and i pray god will also do his will in your life
I am Elizabeth by name.

Submitted by elizabeth john

Photo of William Hay William Hay Speaker 7:15, 25 February 2014

Item 6 on the Order Paper is the Adjournment debate.  Members may know by now that the topic will not be debated this evening and will be rescheduled.  However, as it still stands in the Order Paper as an item of business, I ask Mr Clarke to indicate formally that it will not be debated.

Photo of William Hay William Hay Speaker

I am grateful to the Member.

Adjourned at 7.20 pm.