EDINBURGH, Scotland–One credit union CEO here is urging the Scottish government to appoint a financial well-being czar as part of a package of measures to help in the recovery from the COVID pandemic.
Capital Credit Union CEO Marlene Shiels is recommending a three-pronged approach between credit unions, government and employers to steer people through difficult financial times ahead,
according to Scottish Housing News.
“It’s absolutely vital that both the Scottish and U.K. governments show leadership and have a workable plan to help tackle the problem of personal debt,” said Shiels. “The furlough scheme is masking the real extent of the problem and, as it ends, I fear we’ll face a tidal wave of debt related issues. Financial resilience is at an all-time low with around 14.5 million people having less than £100 in savings.
“Appointing someone to specifically oversee the issue of personal debt would be an important first step and a message that the Scottish Government is ready and willing to address the issue of spiraling personal financial problems,” Shiels continued. “The government needs to get ahead of the game rather than waiting to survey the damage and it must act now.”
Five-Point Charter
Capital CU said the appointment of a czar is part of a five-point charter Capital is promoting to aid recovery and includes a call for the U.K. Government to reform the Credit Union Act to allow credit unions to build a more sustainable business model, which will allow them to serve more people that need access to affordable credit, Scottish Housing News reported.
It is also seeking changes to bankruptcy rules to stop those firms that are misleading consumers to sign up to debt solutions that are not right for them, thereby causing significantly more consumer harm, the publication added.
Shiels told Scottish Housing News credit unions and other financial institutions must also play their part helping their members and customers improve their financial well-being and resilience through promoting a savings culture with employers, developing education programs and signposting to relevant help and support.
‘Cracking Down on Poor Behavior’
“We also need to see regulators and oversight bodies cracking down on poor behavior, which often leads to consumers making the wrong decisions and can have expensive and lasting effects on them,” Shiels told Scottish Housing News. “High cost and inappropriate lending and poor advice around debt solutions must stop.”
According to the report, Capital has launched its COVID Wellbeing Package that it is promoting to employers and trade organizations and which includes a suite of educational and support materials as well as products specifically developed to address current issues.