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Councillors back credit unions by dipping into their own pockets
CHESHIRE East Council has ‘put its money where its mouth is’ in its fight to take on payday loan firms which charge ‘astronomical’ interest rates by backing credit union coffers with cash from members’ own pockets.
The entire Cabinet and many councillors have signed up ‘en masse’ to become members of the local Cheshire Neighbours Credit Union (CNCU).
At a meeting of full council on Thursday they also overwhelmingly backed a motion for the council to support and promote credit unions across the borough and in secondary schools.
The aim is to boost credit unions’ funds to lend to more hard-pressed local people and reduce the risk they will be pushed into the arms of payday loan firms or illegal loan sharks – which charge astronomical interest rates.
One payday loan firm was found by councillors to be charging interest of more than 5,850 per cent.
Clr Michael Jones, leader of Cheshire East Council, said: “I am delighted this council has demonstrated such a strong commitment to supporting Cheshire Neighbours Credit Union.
“That the entire Cabinet has signed up along with, I believe, the majority of ward councillors, sends a powerful message to the wider community from elected members – who have vowed to actively combat payday lenders by encouraging greater credit union membership.
“This is a fantastic demonstration of our council values.”
Cheshire East recently banned access to 50 payday lender websites in its libraries and public buildings – the first English council to do so.
Clr Jones announced, at full council, that all 10 members of his Cabinet had signed up to put some of their own money into the local credit union, CNCU.
Knutsford Clr Peter Raynes, Cheshire East Council Cabinet member in charge of finance, also asked all Cheshire East councillors at the meeting to sign up to the scheme.
Clr Raynes said: “We want to protect the most vulnerable people from falling into the trap of borrowing money at astronomical rates of interest. This is not about encouraging people to borrow – it is about encouraging people to save.
“Credit unions are superb local institutions which can really help hard-pressed local people access loans, which are affordable and have fair rates, to tide them over.
“I am delighted all my Cabinet colleagues and many members have signed up to provide local credit unions with cash from their own pockets.
“This scheme and help give real practical assistance to hard-pressed local people.”
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