Credit Unions

Lord German Excerpts

Thursday 16th October 2014 Lords Chamber

[Lord Newby]

I begin by recognising the valuable work that the noble Lord does with Lloyds in this respect. The part that the big commercial banks can play, not so much in funding—although that is useful—but also in transferring expertise, is very important. One of the key things now for credit unions in increasing the amount of capital they have at their disposal is to encourage large numbers of people with some relatively small amounts of capital to become members of a local credit union and deposit some capital with it. The work of the Church of England, for example, is potentially very important. There are many members of the church who would be able to join a credit union and put in a relatively small amount of money which could collectively transform the capital position of the many credit unions with a very small capital base.

[Lord German (LD)]

My Lords, the investment made by the Government in the credit union movement has paid dividends. We note with pleasure that 7% of the Scottish adult population is now registered with a credit union. However, for them to rationalise, streamline, offer new products and help people avoid payday lenders, credit unions need to have good back-office bank functions and new products. What progress has been made with the banking sector and the Post Office to provide those appropriate back-office functions which will allow them to become more streamlined and help people to keep out of the hands of payday lenders?