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NewsCredit union merger will help to drive out payday lenders and loan sharks
Credit union merger will help to drive out payday lenders and loan sharks

The merger of two Wolverhampton credit unions has been hailed as a major victory in the battle to rid the city of loan sharks and high interest payday lenders.

The city’s Low Hill-based NEW Friends Credit Union will merge with Worcester Street-based Wolverhampton City Credit Union to create a community bank of over 6,000 members with savings of around £2 million.

Members voted for the merger at the annual general meeting of Wolverhampton City Credit Union on Monday March 16, 2015.

Wolverhampton City Credit Union manager Matt Goulding said: “This is a really momentous development for credit unions in Wolverhampton and South Staffordshire.  The merger will enable us to offer a wider and better range of services and further safeguard the sustainability of the credit union for many years to come.

“We’re also in a better position than ever before to drive out the loan sharks and high

interest payday lenders that blight our neighbourhoods.”

Roger Coverley of NEW Friends Credit Union - a community credit union based in North-East Wolverhampton currently run by volunteers - also welcomed the merger: “Together, we’re a real force to be reckoned with.  By combining our membership and our assets we can ensure more people have access to low-interest loans and flexible savings.” 

NEW Friends Credit Union has around 1,200 members, savings of around £800,000 and a loan book of £500,000. The volunteers approached Wolverhampton City Credit Union with a proposal to merge for the benefit of members of both credit unions. Members of the NEW Friends Credit Union overwhelmingly approved the merger in January.

The merger will not cause any disruption to existing services and benefits. Loans and account rates will not change from the agreed levels as a result of the merger.  People who are members of both credit unions will continue to receive separate benefits from each credit union.  After integration, accounts and loans will be consolidated under one institution with a combined set of benefits.  Details about the transition will be announced in the months ahead.

Members heard that Wolverhampton City Credit Union had recruited a record 1,460 new members last year, issuing 2,486 loans. The credit union also saved its members more than £500,000 in interest charged by payday lenders. WCCU’s income last year was £309,000 with £279,000 operating costs. It has a surplus of £30,000 and reserves of £450,000. The credit union’s savers will get a two per cent dividend.

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