Credit Unions in England
What is a Credit Union?
A Credit Union is a not-for-profit financial co-operative owned and controlled by the membership or account holders.
Members share a common affiliation, such as place of employment, residence, or membership within a specific organization. To be a member of SCMCU you need to live or work within the post code areas of TS5-6 or 7. After paying all costs any income generated is returned to the members as dividend payments.
Dividend is paid annually on every share held in savings; the amount of dividend paid is decided by the members at their AGM.
Credit Unions operate across the whole of England and all of the United Kingdom and Ireland.
Different countries have their own particular regulations about the operating of Credit Unions. In England there are different types of Credit Unions but all of them are governed by the Financial Services Authority (FSA). This is the Central Government Agency established to regulate all Banks and financial institutions. The FSA regards Credit Unions as the same as any other Bank or Building Society.
Credit Union regulations ensure that all loans are made responsibly and are covered by insurance. Great care is also taken to protect savers and their savings.
Credit Unions vs. Banks
Credit Unions in England are regulated by the same government authority that sets controls on the High Street banks and all other financial institutions.
Credit Unions actually are Financial Institutions offering savings accounts in the same way that High Street banks do but they are very different in the way they operate. High Street Banks are staffed by people employed to produce a profit for the Banks owners. The High Street Bank owners may be multinational corporate organizations anywhere in the world.
A Community Credit Union, such as SCMCU, is staffed by local members who work to provide community banking services; any profits are paid locally to the Credit Union membership. A Community Credit Union exists to provide a local affordable savings and loans service available to all the community where it operates.
High Street Banks are focused on generating their profits and will constantly attempt to sell other services or introduce you to accounts that charge. Credit Unions focus singularly on the best possible service to their membership with each member having an equal say in their decisions.
A big difference between Credit Unions and High Street Banks is the way in which they operate their loans. With all other than a Credit Union, loans have fixed repayment schedules and interest rates. This means that you pay the interest first then start to reduce the capital owed; consequently you pay the same repayment throughout the term of a loan. With a Credit Union loan you only pay interest on the outstanding amount owed. So for every full pound repaid the amount of interest is reduced and a Credit Union charges much less interest than Banks.