Credit unions can protect vulnerable consumers from loan sharks, says the CEO of Leeds Credit Union
Paul Kaye, the new CEO of Leeds Credit Union, said he wanted credit unions to become more mainstream because he believes their services could transform the fortunes of thousands of consumers.
A new report found that Leeds Credit Union has made nearly £ 6 million worth of social impact for West Yorkshire residents over the past four years.
Leeds Credit Union is one of the largest organizations of its kind in the UK, with 37,000 members. In partnership with Housing Leeds, the credit union provides money management and budgeting services to members of society struggling with their finances.
Since 2017 Housing Leeds has enabled tenants to manage their bills, become financially stable and reduce their debt levels.
Mr. Kaye, who previously worked for the Leeds Building Society, said, “We can offer products and services that can help our members that are not purely for profit.”
Using the Housing Associations Welfare Rating (HACT), it is estimated that the value of benefits Leeds Credit Union has provided residents with over the past year is more than £ 3.5 million, equaling £ 5.76 million between 2017 and 2021 .
Mr Kaye said, “The community spirit was so important during the pandemic and we showed it by keeping our branches open and supporting our members.
“People who used to go to loan sharks and doorstep and payday lenders should come to credit unions. But we also want to make credit unions more mainstream.
“You should be there for everyone. If people are looking to save or borrow money, why not with a credit union that works in the local community rather than one that is profit and shareholder-driven? We can lend up to £ 20,000. “
Mr Kaye, who took over the role of CEO in March, said he was keen to ensure that Leeds Credit Union is working with government, regulators and other credit unions to build broader relationships as he believes the Sector could play an important role in helping the economy recover from the pandemic.
Mr. Kaye added, “We can serve a much wider market. If people are ethical to save and borrow, they should use credit unions.”
Mr Kaye said credit unions needed support from regulators and governments to expand their product lines.
“We encourage people to save regularly, which is good for their mental health, through our salary savings and loan product,” he said.
“That means fewer sick days and fewer absenteeism. The economy as a whole benefits from this.
“There are an estimated 11.5 million people in the UK with less than £ 100 in savings. We can help build UK financial resilience if we get the support we need. We consider each person as an individual.
“We don’t want people to get caught in a spiral of debt and we can help them get on the right track.
“Last year we worked with Leeds City Council to assist 1,000 people through our monetary and household services.
Mr Kay acknowledged that at a time when payday lenders were making good use of technology, credit unions may also have been slowly improving their digital skills.
“We have invested in our technology and now people can use us through an app or our website if they want,” he said.
“As soon as people become aware of us, they will likely use us. We hope the new legislation will allow credit unions to offer broader products so that we can offer insurance products and secured loans like auto loans, for example.
“These are huge markets and I see no reason we can’t. This would allow us to reach a wider market and invest in our businesses and our communities.”
“Some of our competitors have to run fast to stand still to expand their loan books because they have shareholders they like. This can lead to poor customer results. But we don’t have to do this because we are not exposed to any external pressure. “
Leeds Credit Union has 40 employees and operates five offices. Mr Kaye said the union wants to continue to increase its reserves to invest in the company for the benefit of its members.
Mr. Kaye added: “I moved to Yorkshire 13 years ago and I’ve always seen people feel down to earth. They know where you are with them which is very refreshing. When I was at the Leeds Building Society my co-workers bought me a mug with Yorkshire sayings – for example, what I used to call an alley was actually a Yorkshire ginnel. I always kept this mug to remember Yorkshire. ”