Leeds launches challenge on high-cost lenders
People in Leeds who are experiencing financial difficulty are being offered a more affordable way out of poverty thanks to a range of new initiatives introduced by the Leeds City Credit Union in partnership with Leeds City Council.
In one of the biggest moves since the Financial Conduct Authority (FCA) introduced its cap on interest rates for payday lenders earlier this year, a partnership between Leeds City Council, Leeds City Credit Union and key high street retailers will see a major attempt to compete with high cost lenders but offering more affordable borrowing options to purchase essential products.
Three new initiatives have been developed to help people who may have previously turned to pay day lenders to obtain credit in a more affordable way. The initiatives are to be launched at an event at the Compton Centre Community Hub in Leeds on Friday.
When: Friday 11 September at 11.30
Where: Compton Centre Community Hub, 322 Harehills Ln, LS9 7BG
What: Leeds City Council’s Executive Member for Communities, Cllr Debra Coupar will be joined by Leeds Rhinos player Liam Sutcliffe to launch the initiatives at the new Your Loan Shop at the community hub. Cllr Coupar and Liam Sutcliffe will do an official ‘ribbon cutting’ ceremony.
Leeds City Credit Union with the active encouragement and support of Leeds City Council has been working to develop these initiatives throughout the year. The result is the delivery of three services which will directly compete with every aspect of the high cost lending market.
The initiatives which have been developed include an extension of the successful "Your Loan Shop" - a credit union facility which was established a year ago on the high street in Harehills. It was designed to challenge the presence of other high street cash lender outlets in the area. This week’s launch will see a franchise of Your Loan Shop opening at a council-run community hub. If successful this model could be rolled out across the city in similar locations.
The credit union has also arranged a scheme with a number of high street retailers utilising credit union loan or savings to enable members to purchase goods at competitive prices and pay for them in small weekly instalments. In some cases this could mean that members could purchase goods for around 50% less* than if they shopped with a high-cost rent-to-buy retailers (*this is the overall cost, including credit).
The credit union will also soon be making available a web-based payday loan product offering significantly reduced interest rates compared to the normal payday sector. This will be available to members in the near future via the credit union’s website: www.leedscitycreditunion.co.uk
Councillor Debra Coupar, executive member for communities said:
"This is a triple whammy for the high cost lending sector. We have worked in partnership with the credit union, advice partners and social landlords and many other partners in the city for many years to do what we can to assist hard-pressed families who don't have access to mainstream affordable financial services.
“We see these initiatives as a way of putting money back in to the household budgets of Leeds families who are struggling as a result of low wages, zero hours contracts and reductions in welfare benefits. Previously many families felt they had no option but to turn to high cost lenders. Now they have a genuine alternative.
“We are particularly delighted that three big national retailers have joined in this initiative. This is a classic example of how the public, private and community sectors can work together in partnership to deliver a better service for citizens of Leeds.”
Representatives from Leeds Rhinos and the Leeds Rugby Foundation will be attending the launch event to show their support for the credit union and council’s work to help Leeds residents get out of poverty.
Gary Hetherington, Chief Executive of Leeds Rhinos, said:
"Many of the rugby fans in Leeds and supporters of other sporting teams are facing hard times and struggling with their household budgets. At Leeds Rugby we are proud of our work in the community.
“A sporting club is not just about performance on the pitch. It's also about how we can use our influence to support the many families who are the supporters of our teams. We are proud at Leeds rugby to declare ourselves a high cost lender free zone and refuse advertising from these companies. We welcome these initiatives by Leeds credit union and the council and hope that many families in Leeds can benefit from these services."
Chris Smyth, Chief Executive of Leeds City Credit Union said:
“We have been working with the council for many years, to develop a suite of products that will compete with the whole high cost lending sector and offer families a genuine more affordable alternative. The launch today provides options to Leeds residents which means that they no longer have to rely on high cost credit. It’s a good news day for Leeds.”
Notes to editors
“Your Loan Shop” (www.yourloanshop.com) is part of Leeds City Credit Union and is a way of making credit union loans more accessible. The first shop opened in Harehills a year ago but is already having a major impact. Over the last 12 months Your Loan Shop (online and in the shop), has helped over 600 people in Leeds. If everyone who has taken out a loan through Your Loan Shop had instead borrowed from a high cost lender it would have cost these families approximately £250,000 more in higher interest charges.
Leeds Credit Union (www.leedscitycreditunion.co.uk) is one of the largest credit unions in the UK and has a number of branches across Leeds and Wakefield with 36,000 members
Leeds Credit Union provides straightforward, affordable financial services to anyone who:
- lives or works in Leeds, Wakefield, Harrogate or Craven
- is a resident of certain housing associations
- who works for one of our select employers
The credit union provides affordable loans at fair rates of interest to meet every day needs and even for larger purchases. Leeds Credit Union also offers a range of savings plans that help our members save providing a real and ethical alternative to high street banks.
The Compton Community Hub is the base for Leeds City Council and NHS services, including the Library and the Welfare Rights Unit, bringing services together under one roof, including:
Adult social care
Children and young people’s social care
Library services with internet access
Job & Skills advice
Council benefits including free school meals
Disabled parking badges and disabled bus passes
Other council services such as environmental services, emptying wheelie bins,
street lighting and maintaining roads and pavements