Your credit union remained open throughout the pandemic and we are here to help you.
Just as Covid-19 and inflation have affected individual and family finances, so they have had an impact on LCCU, particularly on loan approvals and costs.
We now need to continue our work to strengthen the credit union. We have already taken several steps including cutting costs, seeking to renegotiate supplier contracts and looking at ways to grow the organisation while acting within our values.
Now, to help mitigate the impact of the pandemic, and as part of measures to ensure compliance with the amount of capital required for reserves, we are continuing two policies which affect adult members.
A membership levy: This levy will be charged on 2 May 2023 on all active adult members with balance information as of 28 April 2023.
The charge will be as follows:
A levy of £2.50 on all members a SaverPlus balance of less than £100 (one hundred pounds).
A levy of £20 on all members a SaverPlus balance of £101 – £999 (One hundred and one and nine hundred and ninety nine).
A levy of £30 on all members a SaverPlus balance of more than £1,000 (one thousand) or greater.
Although this charge puts us in line with other credit unions, it is only taken with reluctance. We are mindful of the impact any such charge can have on our most financially vulnerable members. Those members with the lowest level of savings are asked to pay the least.
A temporary £30k cap on member saving deposits.
We encourage members to save regularly but a small number of high deposits create a challenge for us because we are required to hold additional reserves against them. The temporary cap on savings deposits applied from 2021 and, following regular review of the impact, we can confirm fewer than 0.1 per cent of members are affected. The ceiling on deposits also puts us in line with many other credit unions.
Members who hold deposits above £30,000 have been contacted and advised of the cap. If we do not hold up to date email, phone and address details then please get in touch to inform us of the changes.
Although more than 99.9 per cent of members will be unaffected by the deposit cap, we understand that some will hold large deposits out of a desire to support the credit union’s work in the alleviation of poverty.
A better way to support our work is take out a loan, and repay it in full, or open a current account. Alongside our other plans to boost income and control costs, we are confident these changes will help support the sustainability of LCCU.
The credit union was set up in Tower Hamlets in 2000. Now, after more than two decades, we want to continue to work with members across East London to ensure another 20 years of improving financial resilience. Thank you for your support.