Commenting on the Ministerial statement on credit unions by Minister for Pensions Steve Webb, and the Government’s Credit Union feasibility study published today, Mike O’Connor, Chief Executive of Consumer Focus, said:
‘Government recognition that there is a significant need for more credit unions is very welcome. Access to affordable credit is a major issue for many consumers, especially where they need small sums to make an emergency purchase or to tide them over for a short time period.
‘High Street Banks should do more to provide affordable credit for consumers, but are dragging their heels. Credit unions are perfectly placed to help plug this gap. Credit unions playing fair and offering competitive rates could transform the market for consumers. They could offer a real alternative to payday loans and other high cost form of credit, which are a growing cause of concern.
‘New research by Consumer Focus shows that one-third of consumers are interested in joining a credit union, but that two-thirds of these say they cannot because they do not think they have one nearby. This is why we believe linking credit unions to our post office network could be a perfect match and help ensure the continuation of the vital community resource which our post offices provide.
‘There are more post offices than banks and building society branches combined and they offer convenient access and high levels of trust. Forty per cent of low income consumers told us they would be more likely to open a credit union account, or apply for a small loan, if they could do so through a Post Office branch.’