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Scottish Parliament Debate on Credit Unions - January 2019

On 17th January, the Scottish Government initiated a debate in the Scottish Parliament to recognise the work of Credit Unions in Scotland’s communities.

The full motion debated was:

Celebrating the Role of Credit Unions in Scotland’s Communities

That the Parliament celebrates the vital role of credit unions in reducing inequality in Scotland by offering affordable loans and savings in the heart of communities, thereby protecting people from predatory lenders and unmanageable debt; recognises that these not-for-profit financial cooperatives provide ethical financial services to a combined membership of over 400,000 people living in Scotland; supports action to further raise the profile of this important sector, building on the Scottish Government’s recent national campaign, Credit Unions: People, Not Profit, and welcomes the continued collaboration between the Scottish Government and the sector to ensure that credit unions continue to thrive for the benefit of Scotland’s communities.

An amendment was lodged by Alex Rowley MSP, of Scottish Labour, which the Government supported:

Celebrating the Role of Credit Unions in Scotland’s Communities

As an amendment to motion S5M-15426 in the name of Aileen Campbell (Celebrating the Role of Credit Unions in Scotland’s Communities), insert at end ", and calls on the Scottish Government to do more to promote the value of payroll deductions among employers and increase awareness of credit unions in schools as part of a broader programme to build financial capability.

Some highlights of the debate: 

  • The debate was opened by Aileen Campbell, the Cabinet Secretary for Communities and Local Government, who noted the impact of the sector, which now covers 7.7% of the population, and notes her desire to continue to work collaboratively with the sector. 
  • The Minister noted the recent 20th anniversary of the NHS Credit Union, which she attended.
  • She recognised the work of the Cross Party Group on Credit Unions, which is organized by ABCUL. She noted the recent presentations by 1st Alliance Ayrshire Credit Union and East Kilbride Credit Union
  • The Minister noted the success of the Government funded Junior Savers Scheme – there are now 58,000 junior savers in Scotland. The Minister announced an additional £85,000 to extend the scheme to September 2019. 
  • The Minister also highlighted the research of the Fairbanking Foundation, which highlighted the key role credit unions play in developing a savings habit. 
  • Claudia Beamish MSP outlined the anniversary of Lanarkshire Credit Union, which she had been involved in. She noted the challenges of rural credit unions in providing coverage. 
  • Alex Rowley, who spoke on behalf of Scottish Labour. He noted a key ask of the Government is how we can all grow the sector. He cited ABCUL’s ‘Work Not Worry’ campaign, which highlighted the importance of financial health within the workplace. He highlighted the need to educate children. 
  • Michelle Ballantyne spoke on behalf of the Scottish Conservatives, noting the strong cross party support for the sector. She noted the work of both the Scottish and UK Governments for credit unions. She highlighted evidence from the American sector of the impact of a credit union part in the workplace, in terms of productivity. She urged MSPs to work with credit unions in their own constituencies to ensure access to junior savers schemes in local schools. Michelle also noted the Carnegie Trusts with 5 credit unions to get more employer partners signed up. She noted the UK Government’s investment in a savings lottery scheme, expansion of the common bond. Finally, Michelle noted the work of Pioneer Mutual Credit Union in developing a partnership to enable members to manage their benefit payments. 
  • Andy Wightman spoke on behalf of the Scottish Greens, noting the parties support for credit unions in their manifesto. He noted that 22% of Scottish households have no savings at all, and we need to be more ambitious for the sector. 
  • Liam McArthur spoke on behalf of the Scottish Liberal Democrats – he noted his membership of Hi Scot Credit Union, which how covers a huge area across the Highlands, and in partnership with many other organisations in the area. He highlighted that Scotland is behind only Northern Ireland, Republic of Ireland and Poland in terms of membership in Europe. He called for the Scottish Government to do more to promote credit unions to employers – for example, by promoting such schemes alongside the Living Wage. 
  • In an open debate Annabelle Ewing highlighted the fact that credit union’s are fully regulated and protected, so members money is safe. She urged anyone listening to consider getting involved with a credit union as a board member. 
  • Maurice Corry noted the importance of the promotion of inclusion. As a veteran, he noted that he was particularly to see the launch of a armed forces credit union in 2015. 
  • James Dornan noted he had been a credit union member for over 20 years, and highlighted the ‘save as your borrow’ model. He noted his thanks for the staff, board members and volunteers of the sector. 
  • Kezia Dugdale noted she was a member of a number credit unions. She noted a campaign she set up as a new MSP called Debt Busters, which sought to promote credit unions. This campaign involved her taking to the streets of Leith to promote the alternatives to high cost providers of the high street. She noted the work of Blantyre (now Lanarkshire) Credit Union to establish a swift loan product to discourage people using Wonga. She called for the Government to offer assistance in developing technology. She also mentioned the work of Castle Community Bank in the community in Leith she had previously campaigned in 
  • Angela Constance noted the achievements of West Lothian Credit Union in lending in the community. She noted that there may be a need for an action plan to set growth goals for  the sector. She noted the importance of supporting capacity of the sector, in capital and technology. She also noted the potential to use money for financial transactions with the sector, which has happened in Wales. 
  • Jeremy Balfour explained that last year he seen the impact of credit unions during a trip last year to Rwanda. He noted the personal service credit unions provide, which is a particular need of older residents, who often feel excluded by technology. 
  • Bill Kidd mentioned his local credit union, Drumchapel, which has been serving the area for 50 years. 
  • Johann Lamont noted the support of the Co-op Party, of which she is a representative, for the growth of the sector. She noted the record of the sector in challenging predatory behaviour in society.  She noted some of the concerns of the sector in relation to some debt schemes. 
  • David Torrance shared the example of a constituent of his, which prompted the establishment of a credit union in his own constituency. He also welcomed the recent announcement that NHS staff in Fife that they can now benefit from membership of the NHS Credit Union. 
  • Tom Mason noted the fact that credit unions are serving people banks refuse to take a risk on. He noted the concerns of the sector that the range of services they can currently provide as restricted. 
  • Willie Coffey paid tribute to the staff of his local credit union in Kilmarnock, Ayrshire CU, and their ‘can do’ attitude when it comes to considering loan applications. 
  • Ruth Maguire spoke about his local credit union, 1st Alliance, which is at the heart of the community. She outlined the recent lending figures – 30% of the loans issued by them over the past few months were issued to customers who would otherwise use pay day lenders. She also spoke about their work to step in when the local bank branch closed, as well as their key role in assisting those impacted by welfare reform. She also spoke about the collaborate approach to developing the recent ‘People Not Profit’ campaign, with the CPG being at the heart of it. 
  • In closing Neil Findley, Scottish Labour, spoke about the challenges in obtaining their own sort codes. He called for the Parliament to have a clause in contracts to ensure their employees have a pay roll savings option. He called for schools funding to be long term. He also mentioned the challenges related to some insolvency solutions. 
  • Alexander Stewart closed for the Scottish Conservatives, setting out the support given for the sector by the UK Government. He noted that ABCUL is calling for reform of the legislation – he says this should be given real consideration. 
  • Finally, Aileen Campbell summed up on behalf of the Government. She urged everyone to see credit unions as being for them. This prompted one MSP to sign up to her local credit union that day! The Minister committed to meeting with credit unions/CPG on the unintended consequences of debt schemes. She also committed to discussing with the CPG what more can be done, and to look into the issue with sort codes raised by Neil Findley.