This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/money/2013/jul/29/credit-unions-membership-archbishop-welby-wonga

The article has changed 7 times. There is an RSS feed of changes available.

Version 5 Version 6
Credit unions thriving even before Archbishop Welby's attack on Wonga Credit unions thriving even before Archbishop Welby's attack on Wonga
(5 months later)
Membership of credit unions in Britain has climbed to more than one million people but the number of customers seriously behind with their loan payments has increased sharply, according to Bank of England data.Membership of credit unions in Britain has climbed to more than one million people but the number of customers seriously behind with their loan payments has increased sharply, according to Bank of England data.
Credit unions were thrust into the spotlight last week when Justin Welby, the archbishop of Canterbury, declared he was throwing the weight of the Church of England behind them to offer an alternative to the likes of Wonga.Credit unions were thrust into the spotlight last week when Justin Welby, the archbishop of Canterbury, declared he was throwing the weight of the Church of England behind them to offer an alternative to the likes of Wonga.
The organisations have traditionally specialised in providing loans and savings products to poorer people, and are seen as offering a vital alternative to banks, expensive payday lenders and loan sharks. The cost of borrowing through them is capped at 2% a month, although this is set to rise to 3% in April 2014.The organisations have traditionally specialised in providing loans and savings products to poorer people, and are seen as offering a vital alternative to banks, expensive payday lenders and loan sharks. The cost of borrowing through them is capped at 2% a month, although this is set to rise to 3% in April 2014.
The figures from the Bank of England suggest that the UK credit union movement is doing well, even without the archbishop's assistance. They reveal that the total number of credit union members in Britain nearly doubled from 562,000 in 2004 to almost 1.04 million in 2012, while total assets more than doubled – from £432m to £956m – over the same period.The figures from the Bank of England suggest that the UK credit union movement is doing well, even without the archbishop's assistance. They reveal that the total number of credit union members in Britain nearly doubled from 562,000 in 2004 to almost 1.04 million in 2012, while total assets more than doubled – from £432m to £956m – over the same period.
However, the number of active credit unions in Britain fell from 565 in 2004 to 390 in 2012. Some have merged with rivals but others have gone bust. At least eight have ceased trading this year, while about six collapsed in 2012.However, the number of active credit unions in Britain fell from 565 in 2004 to 390 in 2012. Some have merged with rivals but others have gone bust. At least eight have ceased trading this year, while about six collapsed in 2012.
The amount lent to members during 2012 totalled £407m, and at the year-end there were 340,000 loans outstanding worth £605m. But arrears levels have risen too. The Bank's statistics show that the number of loans where the borrower is more than 12 months behind with repayments increased from 12,601 in 2011 to 15,069 in 2012.The amount lent to members during 2012 totalled £407m, and at the year-end there were 340,000 loans outstanding worth £605m. But arrears levels have risen too. The Bank's statistics show that the number of loans where the borrower is more than 12 months behind with repayments increased from 12,601 in 2011 to 15,069 in 2012.
At the end of 2012 there were 19,000 credit union loans in Britain where the borrower was between three and 12 months late with their payments, giving a total arrears figure of £14.5m (an average of £765 per troubled loan). This was up from 13,747 loans and £11.3m of arrears two years earlier.At the end of 2012 there were 19,000 credit union loans in Britain where the borrower was between three and 12 months late with their payments, giving a total arrears figure of £14.5m (an average of £765 per troubled loan). This was up from 13,747 loans and £11.3m of arrears two years earlier.
Wonga – the payday lender that Welby has promised to compete "out of existence" – has also battled bad loans. It was revealed in January 2013 that the firm, which charges an annual interest rate of 5,853% APR, wrote off £76.8m during 2011 because thousands of loans proved to be uncollectable. Wonga provided 2.46m short-term loans during the year, with the average advance being £255.Wonga – the payday lender that Welby has promised to compete "out of existence" – has also battled bad loans. It was revealed in January 2013 that the firm, which charges an annual interest rate of 5,853% APR, wrote off £76.8m during 2011 because thousands of loans proved to be uncollectable. Wonga provided 2.46m short-term loans during the year, with the average advance being £255.
The Bank of England also confirmed that credit union members are very much in the minority. Only 1.5% of the adult population in England belong to one, compared with 2.1% in Wales and 6.8% in Scotland, said the Bank. There is also a notable north-south divide: around 3.3% of the adult population of north-west England are members of a credit union, against only 0.4% in the south-east.The Bank of England also confirmed that credit union members are very much in the minority. Only 1.5% of the adult population in England belong to one, compared with 2.1% in Wales and 6.8% in Scotland, said the Bank. There is also a notable north-south divide: around 3.3% of the adult population of north-west England are members of a credit union, against only 0.4% in the south-east.
In April 2013 the Bank of England's Prudential Regulation Authority took over the regulation of credit unions from its predecessor, the Financial Services Authority. The authority has started collecting figures for Northern Ireland and when these are included too, the total numbers of credit unions and members rise to 595 and 1.6 million.In April 2013 the Bank of England's Prudential Regulation Authority took over the regulation of credit unions from its predecessor, the Financial Services Authority. The authority has started collecting figures for Northern Ireland and when these are included too, the total numbers of credit unions and members rise to 595 and 1.6 million.
• This article was amended on 30 July 2013 to correct an error in the number of borrowers more than 12 months behind with loan repayments. The error was in the original Bank data, which was subsequently corrected.• This article was amended on 30 July 2013 to correct an error in the number of borrowers more than 12 months behind with loan repayments. The error was in the original Bank data, which was subsequently corrected.
Top savings accounts
Britannia
Yorkshire BS
Coventry BS
Powered by MoneySupermarket for the Guardian