Credit union proposed for Preston

PRESTON City Council is developing plans to establish a new credit union in the town to provide an alternative source of community finance.

The council has agreed to commission an in-depth study into the costs, benefits and practical issues involved in setting up a credit union with a view to offering low-cost access to smaller loans for people who might otherwise have had to turn to more expensive financing either legitimately through high-rate lenders or illegitimately through loan sharks.

Councillor Matthew Brown, cabinet member for community engagement and inclusion at Preston City Council, said: “Credit unions help thousands of people across the country to save and manage money. If people need to borrow money then credit unions can also help to provide access to affordable credit, rather than turning to loan sharks or ‘pay day’ lenders that charge huge sums of interest, in some cases more than 1,000%.

He said that the council had to explore the option for other parties such as employers or housing associations to provide the service, and also had to engage with other credit unions about the possibility of them extending their operations.

“We think a credit union could really help people in Preston but we must look carefully at all the options and implications,” said Brown.

Also, the council has also signed up to a pledge to offer both its own employees and agency workers a “living wage”.

The council said that it would join a group of national organisations including the Olympic Delivery Authority, Glasgow City Council and accountancy firm KPMG which have committed to paying workers at least £7.20 an hour, as well as using its influence to get other local companies to do the same.

Cllr Brown said that around a quarter of all workers in the city earn less than £7.20 an hour.

“The cost of living has risen enormously in recent years.,” he said. “Higher fuel and food bills mean households are struggling to make ends meet.

”We hope that by taking this stance and becoming a living wage employer, more public and private sector employers will follow suit.”

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