Credit union boost in bid to beat loan sharks and payday lenders

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CREDIT unions increased their membership by 150 people when council workers signed up as savers.

Durham County Council is inviting people to join them as it gathers support for the organisations, with their appeal following on from the announcement a law will be introduced to cap the amount pay day lenders can offer customers.

However, it has sparked concerns the move, which will be included in the Banking Reform Bill, could restrict credit and in turn encourage more illegal lending.

The council is supporting the credit unions to help tackle the rise in high-interest payday loans, which it says can lead to borrowers becoming trapped in debt.

Its employees decided to add their names to the unions following recent sign-up sessions for Prince Bishops Community Bank and NE First Credit Union, which was Durham County Credit Union.

As well as the promise of dividends for savers and the availability of loans, opening an account also means residents can take advantage of low-cost weekly furniture and white goods buying schemes.

Councillor Neil Foster, cabinet member for economic regeneration, who is among its members said: “Credit unions are a great way for people to save and help their whole community.

“During difficult economic times, more and more people are making ends meet by turning to loan sharks or payday lenders who can charge huge sums of interest.”

To encourage more people to avoid payday loans, the council is also in the process of banning access to websites run by the loan firms from all of its computers, which means anyone who tries to log on to one will be redirected to information about the credit unions and help and advice on money matters instead.

Councillor Jane Brown, cabinet member for corporate services, added: “It’s vital that the council takes measures to protect residents from becoming trapped in debt. The block on payday loan company websites will ensure local people are aware that there’s a safer way to save.”

l More information is available from www.princebishops communitybank.org.uk and www.durhamcountycu.co.uk.