17 December 2014

Go-ahead for major church credit union

Fair returns to savers, fair interest rates on loans and the aspiration to be a flagship credit union are among the aims of the Churches' Mutual Credit Union Ltd (CMCU) which received formal authorisation from the regulatory authorities yesterday. This has been a rigorous process undertaken by the Financial Conduct Authority and the Prudential Regulation Authority. CMCU plans to begin to offer its services to those eligible for membership from February 2015.

CMCU has been formed for and with the help of the Church of England, the Methodist Church of Great Britain, the Church of Scotland, the Scottish Episcopal Church and the Church in Wales. CMCU President, Canon Antony MacRow-Wood, said, "I am delighted at the news of authorisation. CMCU will help many, even in its first year of operation and, in due course, it should become a significant financial resource to the church and individuals throughout England, Wales and Scotland. CMCU will enable a virtuous re-cycling of money within the church community, through a combined portfolio of savings and loan products."

At first, churches and individuals (notably ordained ministers, licensed lay ministers, elders, employees and trustees of churches and church charities and the charities themselves) will be able to become members and benefit from the financial products. It is estimated that at least 60,000 individuals plus churches and church charities will be eligible to join CMCU. This will enable savings and provide loans to individuals for essential items and to churches for mission projects and equipment. The Financial Services Compensation Scheme covers deposits up to £85,000.

CMCU plans to offer a range of loan products which will be a major funding stream for the dividend that will be paid on savings products such as ISAs, instant access and regular (monthly) savings accounts. These products will include a competitive car loan scheme.

Once the credit union has built up an established track record it is intended that CMCU will be open to all church members and extend its denominational base. This would require permission from the regulators to alter CMCU's common bond (the definition of those eligible for membership). CMCU aspires to become an example of best practice in the sector and aid the Church's involvement in a critical area of national life for renewal and transformation.

Listen to Canon MacRow-Wood in an interview recorded earlier this year here.

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