Credit unions members reassured

ABCUL Chief Executive Mark Lyonette said: "Credit unions do not rely on borrowing from other banks or the international money markets and are not in the business of buying up the debts of other financial institutions. They are therefore well sheltered from the economic turmoil which is causing worry for so many people at the moment. As credit unions use the savings of their members to make loans to other members they are very self-contained institutions.

"The directors of credit unions are volunteers who are elected from the membership of the credit union, by the membership of the credit union so only have the well being of the credit union and its members to consider - their decisions are not influenced by the demands of external shareholders or short term fluctuations in share prices.

"The events of the last few weeks have given enormous weight to our belief that mutual and local financial services such as credit unions are the way forward in making sure that individuals and families have safe and secure financial services.

"Savings in credit unions are covered by the Financial Services Compensation Scheme in just the same way as deposits held in banks and building societies. The higher compensation limits which have recently been announced are to be welcomed in helping people have peace of mind that their hard earned savings are protected. "

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