A CREDIT UNION is a
co-operative whose members pool some of their savings to provide
each other with credit at a low interest rate.
To be part of a credit
union, you have to share a common bond with other members. This
could be living or working in the same area, working for the same
employer, or belonging to the same association.
Members have a say in how
their credit union is run, and the directors are elected from the
members, by the members, to represent their interests. Profits are
distributed to members in dividends.
Credit unions are
regulated by the Prudential Regulation Authority, which authorises
all applications to establish new unions.
Key requirements
include:
• a registered office
address;
• a qualified auditor or
two lay auditors;
• a business plan,
including financial projections;
• an
organisational-structure chart, setting out names of staff and
their responsibilities;
• a policies-and-procedures
manual showing "robust governance"; and
• an insurance provider.
Sources: Citizens Advice, Financial
Services Authority, Association of British Credit Unions
Limited