About Us
Community Savings & Lending for Everybody
What are Credit Unions?
Credit Unions are financial co-operatives, owned and controlled by their members.
They offer: * a safe and convenient way to save
* easy-to-access loans at fair rates of interest
With no shareholders to pay, Credit Unions concentrate on providing a better and cheaper service than any bank or building society and to everyone in the community.
How is a Credit Union different from a bank?
Banks are owned by shareholders, who share the profits amongst themselves. Credit Unions are owned and controlled by their members, and employ a small team of staff to run the business for them alongside a bank of volunteers who help to keep the running costs minimal. After the running costs have been met the profits are shared out amongst the members in the form of an annual dividend, thus keeping any profits in the pockets of local members.
Aren't banks a safer option?
Since July 2002, Credit Unions have been regulated like the banks by the Financial Services Authority (FSA). The scheme rules how a Credit Union is run and ensures that the people involved in the day to day running of your Credit Union meet their standards. Credit Unions are covered by the Financial Services Compensation Scheme, which means that your savings are covered should anything go wrong.
Important information about compensation arrangements
We are covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to depositors if a credit union is unable to meet its financial obligations. Most depositors – including most individuals and small businesses – are covered by the scheme. In respect of deposits, an eligible depositor is entitled to claim up to £50,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £50,000 each (making a total of £100,000). The £50,000 limit relates to the combined amount in all the eligible depositor’s accounts with the credit union, including their share of any joint account, and not to each separate account.
For further information about the scheme (including the amounts covered and eligibility to claim) please ask at your local branch, refer to the FSCS website http://www.fscs.org.uk/ or call 0800 678 1100.
A Credit Union is a saving and loan organization, set-up, owned and run by its members who share a common bond. Our common bond is 'living or working in Southend'. People who are studying or undertaking voluntary work in Southend are also eligible to join. Credit Unions operate by members saving together to create a 'pool' of money from which loans are made.
Social Banking
A Credit Union provides a real alternative for people who are concerned about how their money will be used and invested. Investors will know that their money is being used for the good of the Southend community and will lead to the development of local traders and businesses.
Objectives
* To provide financial services to the advantage of all members
* To provide low cost loans to members over 18 years of age
* To encourage members to save regularly
* To promote careful money management to our members
How does it work?
A Credit Union receives income from regular savers, grants and local companies sponsorship etc. This creates a large pool of money, which earns interest from the bank and provides low cost loans to its members. As the membership grows, the pool of money grows, allowing the Credit Union to increase the number of loans, the interest from which in turn further increases the Credit Union's income.
After a reserve fund is set aside and running costs have been accounted for, any surplus money is paid to members as a dividend once the members have voted for a dividend at the Annual General Meeting.
Who runs it?
Ultimately, the members do. Initially the Credit Union will be run by a Board of Directors chosen from members of the former Study Group which brought the Credit Union into being. At the first Annual General Meeting, a new Board was elected from among the entire membership with each member having one vote. Members of the first year's Board can stand for re-election. Board members will be expected to hold their posts for a maximum of three years, with a third of the Board stepping down at each AGM. This system has been chosen as it brings a combination both of experience and of fresh ideas to the management of the Credit Union.