26 October 2017
Go-ahead for major church credit union
Fair returns to savers, fair interest rates on loans and theaspiration to be a flagship credit union are among the aims of theChurches' Mutual Credit Union Ltd (CMCU) which received formalauthorisation from the regulatory authorities yesterday. This hasbeen a rigorous process undertaken by the Financial ConductAuthority and the Prudential Regulation Authority. CMCU plans tobegin to offer its services to those eligible for membership fromFebruary 2015.
CMCU has been formed for and with the help of the Church ofEngland, the Methodist Church of Great Britain, the Church ofScotland, the Scottish Episcopal Church and the Church in Wales.CMCU President, Canon Antony MacRow-Wood, said, "I am delighted atthe news of authorisation. CMCU will help many, even in its firstyear of operation and, in due course, it should become asignificant financial resource to the church and individualsthroughout England, Wales and Scotland. CMCU will enable a virtuousre-cycling of money within the church community, through a combinedportfolio of savings and loan products."
At first, churches and individuals (notably ordained ministers,licensed lay ministers, elders, employees and trustees of churchesand church charities and the charities themselves) will be able tobecome members and benefit from the financial products. It isestimated that at least 60,000 individuals plus churches and churchcharities will be eligible to join CMCU. This will enable savingsand provide loans to individuals for essential items and tochurches for mission projects and equipment. The Financial ServicesCompensation Scheme covers deposits up to £85,000.
CMCU plans to offer a range of loan products which will be a majorfunding stream for the dividend that will be paid on savingsproducts such as ISAs, instant access and regular (monthly) savingsaccounts. These products will include a competitive car loanscheme.
Once the credit union has built up an established track record itis intended that CMCU will be open to all church members and extendits denominational base. This would require permission from theregulators to alter CMCU's common bond (the definition of thoseeligible for membership). CMCU aspires to become an example of bestpractice in the sector and aid the Church's involvement in acritical area of national life for renewal andtransformation.
Listen to Canon MacRow-Wood in an interview recorded earlier thisyear here.