Credit Unions set out their stall at world conference in city

08 August 2011

Some 1400 people are expected to arrive in Glasgow this weekend to attend the World Credit Union Conference in Glasgow just as domestic credit unions prepare to take on the high street banks.

Speakers including former Prime Minister Gordon Brown will address delegates at the Scottish Exhibition and Conference Centre.

The conference comes at a critical time for Scotland's 150 credit unions as they are poised to benefit from long-awaited legal changes that will permit them to pay such as housing association tenants.

Credit unions provide savings, loans and other services to members who own and control the institution.

The sector has long had a strong presence north of the Border, particularly in the west of Scotland.

One in five Glaswegians is a member of a credit union. Across Britain just 2% are members.

In recent years credit unions have been seen as catering mainly to the unemployed and low-paid. Many institutions are now making a drive to attract wealthier customers.

Meanwhile, there is a move to share back-office services in order to make credit unions more effective.

These changes could see credit unions starting to offer more services to customers.

Frank McKillop, policy officer for the Association of British Credit Unions Scotland, said: "We are looknig at current accounts and pre-paid cards for members, even the possibility of mortgages being offered by credit unions."

This would allow them to go head-to-head with high street banks.

This is already occurring the United States.

John Lass, senior vice-president at US-based CUNA Mutual, which supplies products to credit unions, including life and health insurance, said: "In the US, customers' trust and loyalty particularly in the national banks  in the US has plummeted.

"Conversely trust and loyalty to credit unions is at an all-time high."

He cited the rapid growth of credit unions such as BECU, previously the credit union for workers at Boeing, but which has seen assets double after broadening its mandate to offer services across Washington state.

Tim Sharp, City Editor, The Herald Scotland, 23rd July 2011