While instant cash loan companies and their proponents may have recently cheered to see two credit unions censured by an industry watchdog, confidence is high that the sector will continue to grow and become an excellent alternative to no credit check short term loans when it comes to Brits in need of cash but who are unable to turn to High Street lenders.
According to the Financial Services Authority’s most recent figures concerning credit unions, there was £703 million currently being managed by credit unions across more than 950,000 credit union members as of September of last year. The Association of British Credit Unions Ltd, the industry body that drew attention to the regulator’s figures, said that £570 million in cash loans were being taken out by credit union members, even though only about 3 per cent of the total population of the UK makes use of credit unions.
This rosy outlook persisted across the entire sector, even as it suffered a temporary setback when two credit unions based in Glasgow were censured by the FSA. The industry watchdog said that Shettleston & Tollcross Credit Union was offering loan terms to its regular members that were less advantageous than those offered to its directors, while the FSA said that Pollock Credit Union had placed the interest of its members and even its own solvency in jeopardy by making sizable loans to one particular non-member.
Mark Lyonette, chief executive of ABCUL, spoke out in defense of credit unions by remarking that the sector still played a crucial role in communities near and wide by granting access to finance to those that would have no recourse short of an expensive, high interest instant cash loan after being turned down by traditional lenders such as banks and building societies.