THE proposed Churches Mutual Credit Union (formerly known as the
Anglican Mutual Credit Union), an initiative between the Church of
England and the Church of Scotland, is going through a process of
authorisation, and is on track to be launched in October 2014.
Initially, membership will be restricted to the ordained and
those training for ordination, licensed lay ministers, employees of
churches, and members of their households living at home with them.
Ten per cent of members can be corporate bodies, such as Anglican
or Church of Scotland charities. In due course, plans are to widen
access to all active members of congregations. The Methodist Church
has been invited to join; and, once the credit union is more
established, other denominations could also potentially enjoy
The capital needed to set up the credit union is coming from a
variety of sources, including Church of England dioceses, the
Church of Scotland, and supportive individuals. The Church
Commissioners have recently agreed to take half of the deferred
shares required in the business plan, representing a £200,000
The CMCU could have considerable impact once it is established.
In the mean time, churches have already been getting involved.
In Mildenhall, Suffolk, volunteers from St Mary's have been
working with the Roman Catholic church, St John's, since late 2010
to run a collection point for the Ipswich and Suffolk Credit Union
(ISCU). Collection points function as additional "branches" of
existing credit unions, where clients can drop off savings and
apply for loans.
The OLM at St Mary's, the Revd Mary Rusted, says that getting
started was straightforward. Training was provided by ISCU, and
only basic equipment was needed: a printer, photocopier, and a
cashbox, plus a room with some privacy. The collection point opens
for two hours every week.
Clients deposit savings from as little as 50p a week, and can
apply for loans which are processed by ISCU. Cash is transferred to
ISCU through a local Paypoint outlet (Paypoint is a network of UK
outlets in shops or other businesses, where cash can be transferred
or bills paid online).
Mrs Rusted says that they offer a more compassionate service
than on the high street, recalling the case of a local man whose
benefits were paid late into his bank, sending him overdrawn. He
was charged £9. "It made me hopping mad. Most of us would have just
gone and had it out with the bank, but this man didn't have the
skills to do that."
Doorstep loans still exist in the area, but she is "delighted"
about the Archbishop's call to give payday lenders a run for their
Although many clients have low incomes, she says that credit
unions need members from a wide community in order to provide the
funds for others to borrow. Her advice for any church thinking of
working with a credit union would be: "Go for it. It's not
effortless, but not hugely demanding. You do feel it makes a
Lewisham Plus Credit Union grew out of an initiative by the
ecumenical Churches Together in Sydenham, in 1992, responding to
the Church of England's report Faith in the City, after
the Brixton riots. It has high-street branches in Sydenham,
Bromley, and Lewisham, and 9500 members, of which 1500 are junior
members (who save using eight collection points in church
The 8000 adult members have £3 million in savings, and only 3000
members borrow. The average loan is £500, which, at a monthly
two-per-cent interest rate (26.8 per cent APR), costs £70 over 13
months. Any profits are paid out as a dividend to members.
One of the original 21 founding members, Liam Carlisle, says
that the Archbishop's comments about credit unions have had a
"Welby effect", and the co-operative has seen an uplift of £50,000
in savings for August compared with those of July.
He advises churches to join with existing credit unions rather
than set one up from scratch. It can cost as much as £300,000 to
establish a credit union, and take up to two years. "It's much
better to positively engage and work with an existing
organisation," he says.