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The Assembly's Committee for Enterprise, Trade and Investment today put forward a Motion in the Assembly to expand the number and services of credit unions. The Motion follows proposals made by the Irish League of Credit Unions and the Ulster Federation of Credit Unions to the Committee.

The credit union movement is seeking around £860,000 per year for five years to cover start-up costs to enable 75 credit unions across Northern Ireland to offer current accounts, debit cards, inward and outward payments, direct debits and standing orders. Once implemented, credit unions would be able to fill the void left by bank branch closures and could replace payday lenders.

Speaking before the debate, Committee Chairperson Patsy McGlone MLA said: "We believe that our Motion deserves and will receive the support of the Assembly. During this financial crisis, banks have been closing branches in rural and deprived areas, paying no attention to the loyalty or the needs of their customers.

"Another issue that we are very concerned with has been the rise of the payday lenders, charging often exorbitantly high interest rates. We strongly believe it would be better to help people access reliable, affordable banking services and short term loans. The proposals from the credit unions amply demonstrate that could be a better way, but we will have to support this financially if it is to happen.

Mr McGlone concluded: "Credit unions are in a unique position when it comes to financial services. They are truly community services; rooted in and managed by local people. They are there to help people manage their money and nobody is better placed to fill the void left by bank closures and provide responsible, affordable lending. Supporting their expansion--giving them the opportunity to offer more services--should be a priority for all of us."

Notes to Editors:

• Credit unions do not exist to make profits. All surpluses are returned to members or used to invest in new and improved services.
• Interest rates in credit unions are capped, by law, at 1% per month (12.68% APR) rather than the interest rates of 4,000% and more charged by some high-interest lenders.
• Credit unions employ 283 full-time and 323 part-time staff with a total salary of almost £9m per annum.
• The expansion of services should increase employment by around 150 staff.
• Credit unions pay corporation tax (2012 figure was £3.75m for ILCU credit unions).
• Credit unions pay rates (almost £650k per annum for ILCU credit unions) and, unlike credit unions in England, Scotland and Wales, which can apply for discretionary rates relief, credit unions here pay the full amount.
• Credit unions in Northern Ireland have received little or no government support before.
• The Financial Inclusion Growth Fund enable credit unions in Great Britain to build infrastructure and to make loans to the value of £175m to financially-excluded people, most of whom had a history of dependence on high-cost credit. This is seen as fundamental to reaching out to low-income and financially excluded people.  Northern Ireland credit unions are excluded.
• From 2012 credit unions in Great Britain are receiving investment of up to £38m over three years to modernise and upscale operations. Northern Ireland credit unions are excluded.