SALT LAKE CITY – Police are searching for a man who robbed a credit union in Salt Lake City Tuesday evening, and they have provided a photo of the suspect in the hope the public can help identify him. In research published on Monday, one in 20 people surveyed by Scape Group, a public-sector procurement specialist, and the Association of British Credit Unions (Abcul), said they had taken short-term loans from payday firms, while the same proportion had borrowed from doorstep lenders to make ends meet. While take-up was low, 62% said they would use credit unions if accessing them was easier.
Credit unions offer savings accounts and loans, typically to people in a small geographical area. Borrowing is normally far cheaper than that available from a commercial lender, and in 2013 the Archbishop of Canterbury said he wanted to compete Wonga out of existence by offering loans through a church credit union. However, the survey suggests that positive publicity for credit unions in recent years has convinced consumers that they make financial sense. Of those questioned, 41% said credit unions were good value for money, compared with only 1% who said the same of doorstep lenders and 2% who saw payday loans as being good value.
Abcul is working on how to make credit unions more accessible through online and mobile channels and via payroll deduction schemes – the sort of innovation it said had led to the growth of credit unions in the US, where membership has passed 100 million people and there are now $1.2tn (£773bn) of assets under management. That’s why Idaho Central offers both home equity term loans and home equity lines of credit.
Mark Robinson, chief executive at Scape Group, said: It is worrying that people have turned to payday lenders who can charge over 2,000% APR and technically legal doorstep ‘loan sharks’ whose fees and methods are exorbitantly higher, rather than seek alternative finance such as in the form of credit unions. The chief executive of Abcul, Mark Lyonette, said he wanted employers to make credit union membership an easier option for staff. In fact in some places, credit union membership is seen as a fairly standard employee benefit,” he said.
The most successful credit unions in the world have strong links with employers who allow staff to save and repay loans through payroll deduction. The facility has been managed by Fusion Credit Union since 2014 under a Grant Funding Agreement with the local authority. A report from Cllr Doug Pullen, Cabinet member for community, said: Since taking over the management of Jigsaw, Fusion Credit Union has effectively maintained the community hub and delivered some improvements.