ISLE OF MAN, U.K.–A credit union to serve this island could be up and running as soon as June of this year following a new proposal.
According to IOM.com, Peel MHK Ray Harmer has introduced a motion to welcome the creation of a credit union and for Treasury to establish any necessary legislation to put one in place. Harmer said such a move would benefit those on low incomes who could often be prey to doorstep and pay day lenders. According to Harmer, in the UK around 11% of people had no access to banking and the figure was likely to be similar in the Isle of Man.
He said the Financial Services Authority had approved the credit union and a license was likely to be issued shortly. In addition, he said, more than 600 people had registered an interest in joining, according to IOM.com.
Once a credit union is up and running, the plan is to use a data processing solution that can be set up anywhere so it could be run from a church hall or community center, for example.
Treasury Minister Eddie Teare seconded the motion and said the existing legislation surrounding credit unions needed updating.
“It is a useful alternative for those not able to participate in the traditional banking system,’ he said.
Teare added he is willing to commit Treasury to establishing a deposit insurance program to guarantee the savings of those who use the CU. The insurance level is yet to be decided but he thought it was likely to be around the £3,000 mark.
Speaking after the Tynwald debate, David Talbot, chairman of the working party supporting the plan, told IOM.com, “The working party has pretty much fulfilled its remit, which was to establish a need for the service, raise funds and get the legislative change in place for it to happen. There is certainly a need, as we have about 630 people virtually queuing up outside the door.”