Press Releases
Cornish Community Banking launches new services to help savers and low-income borrowers
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Lady Mary Holborrow and Annette Egerton cutting the celebratory cake.
Diary date/photo opportunity: 10.30am, Friday 18 June 2010
A pioneering affordable loans scheme, designed to ease rural financial exclusion, is unveiled during a sign-up ceremony for Cornwall and The Isles of Scilly’s first credit union current account.
Slate Gallery, County Hall, Truro, TR1 3AY
Cornwall’s largest credit union, Cornish Community Banking, is expanding the range of financial services it offers to savers and borrowers as part of an effort to tackle rising local levels of debt and reduce the amount of money flowing out of the region in interest repayments to doorstep lenders and other high-cost credit providers.
At an event in Truro on Friday 18 June, Cornish Community Banking (CCB) will become the first credit union serving Cornwall and The Isles of Scilly to offer a current account and a new-style one-stop loan it helped to pioneer and which is now being adopted in other rural areas, including Devon.
CCB spokeswoman Katrina Wagstaff says: “With these new services, membership of Cornish Community Banking becomes a very attractive option for everyone who lives or works in Cornwall and The Isles of Scilly, whether they have money to put by, or are struggling to make ends meet. They mean our customers will be able to call on the credit union for most of the services they would get from a traditional bank or building society, including savings, bill payments and borrowing, but with the added bonus that we are more flexible over who is eligible for a loan or the minimum which can be saved. In keeping with the ethos of credit unions generally, we also guarantee that all savings with CCB and any interest payments stay within our region so boosting the local economy and supporting local businesses and employment.”
Project supporters include Cornwall Council, Cornwall Works, Inclusion Cornwall, Cornwall and the Isles of Scilly Primary Care Trust and Cornwall Citizens Advice Bureau – with several of them encouraging staff and members to be among the first to open CCB current accounts at the18 June event, on payment of a £2 enrolment fee and initial deposit.
The introduction of the one-stop affordable loans scheme has been given an especially warm welcome by England’s Rural Financial Inclusion champion, Will Aston, and by the Commission for Rural Communities (CRC), which advises government on rural challenges and solutions.
Will Aston said: “We have been lobbying long and hard for the financial challenges of rural people to be addressed so we are delighted at the efforts by Cornish Community Banking, and other credit unions, to make affordable credit available to many more rural people.”
Under the new fast-track loan scheme, CCB members will be able to borrow up to £600 on easy-to-manage terms and at interest rates well below those usually charged by the credit sources to which households on low pay or State benefits, or in remote areas, are often forced to turn when faced budget challenges. The scheme is launching in Cornwall but is also being adopted by credit unions in other rural areas, including Devon, North Yorkshire, Northumberland and parts of Gloucestershire.
Will Aston explained: “Almost everyone needs extra money from time to time but getting it can be a major problem for low-income groups, especially for those living far away from mainstream providers or where public transport or Internet provision is patchy and where, for instance, raising £100 or so to fix your car may be the only way to hold on to a job. In such circumstances, it is easy to see why some rural people are tempted to turn to doorstep lenders or unregulated loans. But often, this simply makes bad situation worse - burdening borrowers with unmanageable interest rates of 200% APR or more and taking money out of the local economy when it could be supporting local businesses and jobs. Affordable loans can make all the difference – to individuals, their households and their communities. “
Cornwall’s Lord Lieutenant, Lady Mary Holborow, will be the chief guest at CCB’s launch event. And the keynote speech will be given by Carleen Kelemen, Director of Convergence Cornwall. Other guests will include CCB funders and supporters including representatives of Cornwall Council.
Recent CAB research shows that household debt is a growing problem in Cornwall, with the average now approaching £9,000 excluding mortgages. It is also estimated that 20% of the population falls below the annual income threshold set by most mainstream lenders. Precise doorstep lending figures aren’t available but it is estimated that around £1.5 billion is owed nationally at interest rates well above High Street rates. For example, CCB estimates that repaying a £500 doorstep loan at £17.50 a week over 52 weeks typically costs the borrower £910, compared with £561 for a credit union loan repaid at £11 weekly.
To address the issue, Cornwall Council is working with credit unions and advice agencies across the county, to give residents better access to budget management support and guidance.
Neil Burden, Cornwall Council’s Cabinet member for Children, Schools and Families, says: “The scale of personal debt in Cornwall is truly horrific and is having a negative impact on the lives of many Cornish residents. It also creates a domino effect leading to ill health, repossessions, homelessness, etc, which have a direct impact on many of the Council’s services. The Council is taking proactive steps to try and prevent this downward spiral from occurring by taking forward plans to strengthen the credit unions in Cornwall.”
Alec Robertson, the Leader of Cornwall Council, added that he is delighted by the role the Council has played in enabling CCB to extend its services.
“The Council’s support means that we have been able to build on the success of the existing credit unions to cover the whole of Cornwall and develop a network of accessible locations such as Council offices and One Stop Shops where people can go to get advice and support. “
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NOTES TO EDITORS
Cornish Community Banking is the trading name of the Cornwall and The Isles of Scilly Credit Union Ltd, a locally managed financial co-operative, authorised and regulated by the Financial Services Authority (Reg. no. 213699). It is part of a fast-growing worldwide movement involving more than 100 million members in 79 countries. Britain alone now has more than 500 credit unions, with more launching regularly. The aim of all credit unions is to encourage members to manage their own money sensibly and use jointly-held savings to provide low-cost loans to local people. Cornish Community Banking is headquartered at 11a Frances Street, Truro TR1 3DN, telephone 0800 0556873 or email: mail@cornishcommunitybanking.co.uk. For more information about its financial services and branches, please see www.cornishcommunitybanking.co.uk . For more information about credit unions, please see the Association of British Credit Unions Ltd website: www.abcul.org/
CCB’s low cost ‘capacity-based’ affordable loans build on a pilot begun two years, with the support of Restormel Borough Council. They recognise that low-income rural households are not only especially vulnerable to the sales tactics used by some doorstep lenders but also often experience the greatest difficulty in coping with the unusually high repayment terms.
Following the success of the Cornish Community Banking trials and the scheme’s inauguration in Cornwall, several other credit unions serving rural areas will shortly launching similar schemes based on the CCB model.
The post of Rural Financial Inclusion Champion is hosted by the Commission for Rural Communities, which is tasked with providing well-informed, independent advice to government and ensuring that policies reflect the real needs of people living and working in rural England. It has a particular focus on tackling disadvantage and economic underperformance. For more information about its work, see www.ruralcommunities.gov.uk
Partnership working with Coastline Housing Ltd
COASTLINE HOUSING IN COMMUNITY BANKING PARTNERSHIP
06 May 2011
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Coastline Housing has signed a new partnership agreement with Cornish Community Banking that will offer welcome financial support to customers.
Many Coastline customers are financially excluded, which means they do not have access to affordable borrowing or cheaper bank accounts. This is usually caused by a poor credit history or low income.
Cornish Community Banking is the main local credit union in the area. It offers loans at around 26.8% APR, which although high compared to some high street lenders, is far more affordable for customers who have a poor credit rating. They also offer banking facilities and savings accounts.
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Commenting on the partnership, Kelly Parr, Coastline’s income manager, said: “We are very pleased to be working with Cornish Community Banking to create this great opportunity for all new customers. Moving house is an expensive time, so we hope we can support customers by raising awareness of the more affordable borrowing options available.”
Cornish Community Banking’s partnership and outreach co-ordinator, Katrina Wagstaff added: “Cornish Community Banking is delighted to take our partnership working with Coastline Housing Ltd to this new level. This agreement will enable us to support tenants at the start of a new phase in their lives with our ethical savings and loans.”
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