What is a Credit Union?
Gloucester Credit Union Ltd. was formed by the merger of two former credit unions:
- St. Peter’s Credit Union
- Glevum Credit Union
and served the City of Gloucester (postcodes GL1-GL4)
In January 2011, the common bond was expanded to cover the whole of the County of Gloucestershire.
The new name of Gloucestershire Credit Union Ltd. was adopted
At present, Gloucestershire Credit Union Ltd. is working to provide services across the county including collection points in towns and villages.
GCU provides a focal point for the community by bringing people together, to work alongside each other to provide their own financial support through a local savings and borrowing scheme.
GCU offers convenient savings and loan facilities throughout the county at low interest rates to its members. Importantly, all members are able to have a say in how GCU is run.
The three main aims of GCU are:
•To encourage its members to save regularly.
•To provide loans to members at very low rates of interest.
•To provide members with help and support on managing their financial affairs (if required).
What are the benefits of GCU?
9It is an easy and convenient way to save and borrow.
9It offers very low cost loans.
9Insurance at no direct cost, so your savings are safe.
What is a Credit Union?
A Credit Union is a profit sharing, democratically run financial co-operative which offers convenient savings and low interest loans to its members. The members own and manage their credit union themselves. The three main aims of a Credit Union are:
- To encourage its members to save regularly.
- To provide loans to members at very low rates of interest.
- To provide members with help and support on managing their financial affairs (if required).
What are the benefits of a Credit Union?
- It is an easy and convenient way to save and borrow.
- It offers very low cost loans.
- Insurance at no direct cost.
- It’s a way to learn new skills.
Credit unions can provide a focal point for a community by bringing people together, to work alongside each other for their own benefit and the benefit of the community as a whole. A credit union can help to revive the local economy by keeping money in the community. Loans to members can mean income for local shops and businesses.
Who supports Credit Unions?
Credit Unions are supported by numerous organisations, including:
- Community Groups
- National Consumer Councils
- Citizens Advice Bureau
- Trading Standards
- Registered Social Landlords
How do Credit Unions work?
The members make regular savings, as little or as much as they wish. These savings then form a common pool of money from which loans are made to members. When members have been saving for a certain period of time (usually about 12 weeks) they can apply for a loan from the pool. Interest on the loan is usually charged at only 1% per month on the monthly reducing balance (12.68% APR). The interest charged on loans is the credit union’s income.
Who can join a Credit Union?
The membership criteria of a credit union is called the ‘Common Bond’ - something that applies to every member. This could be a geographical area, a trade union, employment by the same company and so on.
Each Credit Union is formed by adopting the common bond most suitable for its purpose
Gloucestershire Credit Union Ltd. recently expanded its Common Bond to include all those who live or work in the County of Gloucestershire. This means that anyone living or working in Gloucestershire can now be a member of a credit union whereas this did not apply before. Gloucestershire Credit Union ltd. welcomes everybody from within the Common Bond regardless of income, employment status or age.
How do you join a Credit Union?
You will need to complete an application form and provide some ID. If you want to join Gloucestershire Credit Union, Check out the ‘How to’ Section of thiswebsite.
How safe is my money?
For security Credit Unions must be registered with the Financial Services Authority. They are covered by the Credit Union Act. They are independently audited every year. They are regularly monitored by the FSA. Your business is private in the credit union because all members and Officers who have access to personal information must act in a confidential manner at all times. They are insured against fraud and theft. They provide life and loan protection insurance or are members of a Death Benefit Trust. There is no direct cost to members for these services and members are able to nominate a beneficiary. The life savings insurance means that if you die, your beneficiary could receive an extra amount in addition to the value of your shares. The loan protection insurance is intended to cover the amount outstanding on your loan (if you had one).
Where do Credit Unions exist?
Credit Unions are a development of the co-operative movement that started in the UK in 1850. Starting in Germany over 150 years ago they spread throughout Europe, to North America, Canada, Asia and to Ireland. Good ideas do catch on and credit unions are well established in most of the world. One third of the adults in Ireland are members of a credit union. Credit unions are steadily increasing throughout the UK both in communities and the work place. ( e.g. Police Force, British Airways, Fire Service, local authority employees etc).
Credit Unions are regulated by the Financial Services Authority to provide protection for members if a Credit Union should run into difficulties
The Consumer Financial Education Body has a ‘Money made clear’ website contains more information about Credit Unions