Why do we need a Credit Union in St Albans?
The Credit Union has now loaned out over £600,000, most of which has been already repaid/recycled for further lending. Some loans have been to encourage and support the development of sole trader business, for which we obtained a very helpful grant through the District Council, but most loans are made to ease difficulties caused by our credit system. The current system encourages some to overspend on credit cards and bank loans, yet forces other small borrowers to resort to doorstep lenders who can charge between 100% and over 1000% (yes, one thousand per cent) APR interest.
Just some examples where we have helped are:
A Harpenden saver in the collapsed Farepak unregulated savings scheme, who faced a meager Christmas because of the collapse of Farepak..
A London Colney member, made bankrupt solely because of a failed business credit or, could not keep up with the penalties and interest being added by the Inland Revenue on to a Tax Bill. We helped with a low cost loan.
A single parent whose clothes were kept in plastic bin liner bags because she couldn't afford a wardrobe. After her loan she wrote to thank us for 'making her house into a home'
The holiday we financed to relieve the stress on a Redbourn couple where the wife
had been stabbed nine times by a drug-
A care home worker who was about to receive a visit from the bailiffs because of unpaid Council Tax from several years earlier. This lady had earlier been assured that she would not be liable to Council Tax while she was receiving Income Support and Housing Benefit. However the advice was incorrect, owing to a confusion of dates about the tax and the period of incapacity. A Credit Union volunteer accompanied her to the Council Offices, arranged deferment of action by the bailiffs, and arranged for a modest loan to cover the unpaid bill.
Another St Albans care worker needed a loan for good reasons and had borrowed £1,
500 from a loans company that was charging her 3.2% per month interest. They had
also sold her payment protection and life insurance costing her £600 for the period
of the loan -
A car body shop worker, originally from Ghana, was granted a loan of £3,000 from
a loans company at 49.7% APR. After approaching me Credit Union and providing evidence
of earnings the Credit Union granted the loan at 12.68% APR. The high-
A Credit Union member with an existing loan did not think that the Credit Union would consider lending her another £700 when her car engine needed replacement. Desperate to have her vehicle back on the road she borrowed the £700 from a 'doorstep' lender under terms that meant she had to repay £980 over 14 weeks at £70 per week. That's an interest rate of 4.84%/week or around 1100% APR!! She had already repaid some of her existing loan with the Credit Union so we took out her 'doorstep' loan, saving her most of the interest that she would have paid.
July 2008
