What is a credit union?

Credit unions are not-for-profit, member-owned, savings and loans providers.

When you join a credit union you become a member of a worldwide group of financial cooperatives dedicated to improving the financial wellbeing of millions of people.

Credit unions across the world have 217 million members in 105 different countries. In Wales, we have 15 credit unions, providing a place for members to save and get loans at reasonable rates. Collectively, Welsh credit unions have around 80,000 members, with £53m in savings and £23m in loans (BoE statistics, Q3 2021).

As an ethical alternative to high street banks or doorstep lenders, credit unions put you – the members – at the very heart of everything we do. Unlike banks, credit unions are run as cooperatives by the members for the members. It means that when you become a saver, or borrower, with your local credit union, you also become a member and have a say in how it’s run.

Each member has one vote and volunteer directors are elected from the membership. There are no external shareholders or investors with credit unions, so any surplus profit is returned to members via an annual dividend. That means the emphasis is always on providing the best service to members – putting you ahead of profits.

Credit unions across Wales offer savings and loans through our offices, online, with Payroll Partners and School Saver schemes. Savings accounts allow you to save small or large amounts whenever you can. They are also benefitting the wider community because they are being used to make loans available for other members.

When you need a loan, you will find credit unions do things differently. Our staff are financially sympathetic and take the time to understand your individual circumstances, not just your credit score. What’s more, the interest rate advertised, is the one you will receive if your loan is approved.

Interest is charged on the reducing balance of the loan and you can pay it back in different ways, including directly from your salary if your employer is a payroll partner with a credit union. Free life insurance is usually included at no extra cost and there are no hidden charges or penalties for repaying the loan early.

Credit unions are regulated by the Financial Conduct Authority and the Prudential Regulation Authority and, as a member, your savings are protected through the Financial Services Compensation Scheme up to £85,000, just like they are with a bank.