Credit Unions are mutual financial organisations, run in the interests of their members and the local community.
As a mutual financial institution, Credit Unions have no external shareholders to appease. This means that CUs have no conflict of interest between the customers and the owners of the organisation – because they are one and the same people. Members (or customers) decide how the Credit Union is to be run, and elect a board and management team to run the Credit Union in their shared interests.
To keep these interests broadly harmonious, CUs only allow new members to join if they share a “common bond” with the current members, and with the Union itself. This common bond is usually a shared geographic location, but can also be membership of a profession, club, or association.
This means that when you move your money to a Credit Union, you know that it’s helping people in your local area or common bond, rather than being lost to tax havens or funding climate change. As a result, Credit Unions generally feel much more connected and personal than the service you’d expect from a traditional high street bank.
Credit Unions are also set apart by their commitment to financial inclusion and ethical lending. By providing affordable and ethical loans that are coupled with financial training for their members, Credit Unions are helping to bridge the gap left by the big banks that refuse to provide services to over 8 million people in the UK.
With all deposits up to £85,000 protected by the government, Credit Unions are at least as safe as any high street bank – and most likely safer, given their high levels of cash saved for a rainy day, and risk-averse lending policies. As a result, its no wonder Credit Unions are rapidly gaining in membership and popularity, with public support voiced by everyone from the Archbishop of Canterbury to the Chancellor of the Exchequer.
To find a Credit Union in your local area, head over to ABCUL’s Find Your Credit Union website here.