Craigmillar Credit Union

2 Niddrie Mains Road
Edinburgh
EH16 4BG

Tel: 0131 661 9942
Fax: 0131 661 6472

E: craigmillarcu@googlemail.com

What's it all about then?

FAQ

I don’t think I can afford to save, never mind borrow?

I’ve not got a bank account?

What’s all this about Common Bonds?

I'm not earning a wage at the moment?

Can anyone be a member?

What is someone’s got a bad credit record?

Who makes all the decisions about the Credit Union?

How much can I borrow?

Would I get a loan for anything?

What if I need to take out my savings?

Can I use my savings to pay off my loan?

Can I borrow more money if I already have a loan?

What if my loan is refused?

How do I know my money is safe?

Is my business private?

What if I lose my job and can’t pay a loan?

What if I move to another area?

How much does a loan cost?

Who decides about loans?

How do I put money into the Credit Union?

Can my family join as well?

I don't think I can afford to save, never mind borrow
Credit unions don't discriminate between members because of the amounts of money they have at their disposal. The system works equally well for all. So, whether you can save a pound a week or a hundred pounds a week, you are equally entitled to enjoy the benefits that regular saving with a credit union can bring.

Back to the top >>

I¹ve not got a bank account?
Again, the financial status of a member is not a condition of membership. Whether you cannot get access to a bank account or simply choose not to have one, has no bearing on your eligibility for membership. Moreover, Craigmillar Credit Union has an agreement with its own bank to enable members credit union cheques to be exchanged for cash, regardless of whether or not they have an account at the bank.

Back to the top >>

What¹s all this about Common Bonds?
Before it can be approved as such, every credit union must satisfy the regulator that there does not exist within its membership a "Common Bond" that justifies the establishment of a financial co-operative (unlike other financial institutions). Most credit union common bonds are based on either geographical, associational, employment or trade criteria. In the case of Craigmillar, qualification is that of "living or working" within the Greater Craigmillar area.  This means that anyone who either lives or works (or both) in the area is eligible

Back to the top >>

I'm not earning a wage at the moment?
The credit union does not require any proof of income or employment from new members. As stated earlier, credit unions do not discriminate on financial (or any other) grounds

Back to the top >>

Can anyone be a member?
Provided that an individual can satisfy the requirements of the common bond and can provide satisfactory identification/proof of address at time of joining then, under normal circumstances membership would automatically be granted.

Back to the top >>

What if someone's got a bad credit record?
Craigmillar Credit Union does not run credit checks on members. The only credit history that is of relevance is the one that the member builds up with the credit union. That is to say, a member who demonstrates good savings and borrowing patterns will satisfy the lending criteria that informs the consideration of credit union loan applications.

Back to the top >>

Who makes all the decisions about the Credit Union?
The credit union is managed by a voluntary Board of Directors, elected by the members at the AGM. All members are entitled to stand for election to the Board. The Board has the responsibility to ensure that all the credit union¹s statutory, legal and moral obligations are being observed and, above all else, to ensure the integrity and security of members assets.The Board is assisted in its duties by the Supervisory Committee which performs an internal audit function to ensure that all the systems, procedures and policies are at the same time in place, correct and being adhered to. This acts as an important failsafe in terms of management of the accounts and the composition of this committee is independent from the Board of Directors. Ultimately, Craigmillar credit union belongs to the members and it is the members responsibility to see that the credit union's affairs are being run with integrity at all times. Therefore the AGM is the key mechanism for exercising the democratic principles which direct credit union activities.

Back to the top >>

How much can I borrow?
After an initial qualifying period of 10 weeks (to allow new members to build up an early track record of regular savings, no matter how small) members can apply for a first loan of up to twice their savings balance. For any subsequent loans, it really comes down to the individuals track record and unsecured loans of 4 times the shares balance (up to the maximum of £5,000) can be applied for. See the section on loan policy for further details.

Back to the top >>

Would I get a loan for anything?
Just like an unsecured bank loan, credit union loans can be for virtually any purpose and would cover all the typical things that people normally borrow for, such as holidays, Christmas, household goods and so on. Many people use their credit union accounts in a way that allows them to borrow two or three times a year to coincide with the sort of expenses that come around at set times annually, such as those mentioned above.

Back to the top >>

What if I need to take out my savings?
You can get access to your savings at any time, provided that you allow some notice of your intention to make a withdrawal, to allow processing. However, as credit union loans are generally unsecured, you cannot withdraw any shares that are acting as collateral for any outstanding loan you have. Any surplus of shares over loan can of course be withdrawn in the normal fashion.

Back to the top >>

Can I use my savings to pay off my loan?
This is called a "share to loan transfer" and is permitted providing that your share balance is greater than the outstanding loan balance. You cannot do a transfer if by doing so an outstanding loan balance would remain. Members are encouraged to protect their share balance as much as possible as this is what provides the collateral for future loans. The more you have in your savings, the more you can apply to borrow.

Back to the top >>

Can I borrow more money if I already have a loan?
Yes, under certain circumstances. Any current loan must be 75% repaid, your repayments must be up to date, the new loan balance must be in accordance with statutory limits, and your share balance must be proportionate to the new amount being sought. It's also worth noting here that the practice known as "share loading" is discouraged. That is where a member makes an uncharacteristically large deposit to their savings or loan just prior to applying for a fresh loan. Such deposits will normally be disregarded when consideration is given to the subsequent loan application.

Back to the top >>

What if my loan is refused?
All loan applications are considered entirely on their own merits. In the case of a first loan this would largely depend on whether or not the member demonstrated a good record of savings and had been a member for the minimum qualifying period of (10 weeks). Subsequent loans would be further dependant upon a clear track record of repaying any earlier loan(s) in accordance with the signed loan agreement and the credit union's Loan Policies. In the event of refusal the member would be informed of the reason(s) and would be offered the opportunity to discuss alternatives in situations where it was clear to the committee that the member was experiencing financial difficulties. The credit union is in the business of helping members and to grant loans irrespective of the underlying financial circumstances is rarely in the best interests of a member with financial problems. It should be noted, however, that a declined loan application in no way affects the member¹s standing in the credit union, is not a reflection of the members integrity and does not preclude the member from submitting further loan requests at a later stage. It should also be noted that the vast majority of applications are approved without difficulty, and this is in no small part due to the fact that the majority of members understand the credit union system, and know what is realistic in terms of making loan requests. This is equally helpful both to the members and the committee charged with granting loans.

Back to the top >>

How do I know my money is safe?
There are several safeguards in place to ensure the security of you money. The Governments Financial Services Authority, the same body that regulates all providers of financial services in the UK, closely monitors credit unions. Credit unions must submit quarterly accounts to the FSA, as well as annual audited accounts. The FSA has the statutory power to close, restrict or intervene in the running of a credit unions financial affairs. The credit union must satisfy the FSA at all times that the value of its shareholding is worth at least 100%. That is to say that in the event of the credit union closing down, its members would received 100 pence in the pound for every share held.

Shares are also protected against fraud and theft by a compulsory scheme known as the "Fidelity Bond". This requires the credit union to make annual insurance payments, free of charge to the members, to cover any losses incurred through any act of dishonesty. As mentioned earlier, it is also the duty of the credit union's Supervisory Committee to run regular internal checks on all policies and procedures, and, in the event of anything giving rise to potential cause for concern, bring it to the immediate attention of the Board, or other appropriate authority.

Back to the top >>

Is my business private?
Absolutely. All your credit union affairs are treated in the strictest confidence. Except where required by law, or in the event of the credit union pursuing a member for unpaid loan arrears, the credit union will not reveal any information about you to a third party.

Back to the top >>

What if I lose my job and can¹t pay a loan?
Don't panic! Credit Unions are not in the business of harassing members for money they can't afford. People's circumstances change and the credit union recognises that can cause unforeseen difficulties in meeting existing financial commitments. If a member encounters such difficulties all we ask is that they speak to the credit union as soon as possible - provided the credit union is aware of the problem then it is virtually certain that a solution can be mutually agreed. It is only when a problem is ignored by the member that it is harder for the credit union to assist. Remember that credit unions are all about helping people with money matters and you don¹t need to be employed to benefit from its service.

It is the policy of Craigmillar Credit Union to take all possible steps to recover unpaid loans where it is clear that the member is refusing to pay, as opposed to experiencing difficulties and seeking to renegotiate loan payments. By adhering strictly to this policy CCU has an excellent record of low incidence of bad debt.

Back to the top >>

What if I move to another area?
Once a member-always a member! Even if you move out of the common bond, you are entitled to continue to use the service, as well as becoming a new member of any credit union existing in your new area. You are entitled to be a member of as many credit unions as your circumstances qualify you for.

Back to the top >>

How much does a loan cost?
The lending rate for all credit unions is set by law. It has recently been doubled to 2% per 30 day period but we continue with the old rate of 12.68% per annum, or 1% per thirty day period. Credit unions have the discretion to introduce a rate lower than this, but not higher. Unlike other conventional sources of borrowing, credit union loans have the added advantage of having the interest rate applied to the outstanding balance- therefore the interest payable reduces in line with the decreasing loan balance. Furthermore, as members are expected to continue to save at the same time as repaying a loan, you will see your savings balance grow over the duration of the loan. Thus, by the time the loan is cleared you have a greater shares balance which, in turn, puts you in a good position to apply for a new loan.

A further attraction to borrowing from your credit union is the fact you don¹t necessarily need to increase your regular commitments, unlike a typical bank loan where you would need to budget for increased expenditure to cover the repayments. For example if you had regularly been saving say £10 each week, you could take a substantial loan without increasing that amount. Quite simply all that changes is the way in which that £10 is distributed through your account. Approximately £8 would be the loan repayment, the remaining £2 would cover the interest due and also make a contribution to your increasing savings balance - no catches!

Back to the top >>

Who decides about loans?
All loan applications are considered by the Credit Committee, which comprises a minimum of three members. It is the responsibility of this committee to consider all applications fairly and objectively, and in full knowledge of all available information relevant to the request. The decision of the committee is final, but it can refer the application to the full Board if it is unable to make a firm decision (the vast majority of application prove to be in good order and approval is a matter of routine). Individual members of the committee play no part in decisions about loans in which they may have an interest.

Back to the top >>

How do I put money into the Credit Union?
There are a number of methods of using your account including, cash/cheque payments, bank standing order and payroll deductions. Contact the Credit Union for further details.

Back to the top >>

Can my family join as well?
As stated earlier, everyone who meets the living or working common bond criteria for Craigmillar Credit Union is entitled to join. In the case of junior members it should be noted that they are not legally entitled to borrow until they reach the age of eighteen, as is the case with all other sources of credit. Nevertheless, there is no lower age limit of becoming a saver. Indeed, to date our youngest member was signed up by his parents at two months old, and already has over three years track record of saving.

Back to the top >>

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .