Paper (number to be added later by John)

Finance Committee

Churches’ Mutual Credit Union


Paper (number to be added later by John)

Finance Committee name

Churches’ Mutual Credit Union

Basic Information
Contact name and
email address / John Ellis, Treasurer

Action required / Decision
Draft resolution(s) / General Assembly welcomes the participation of the United Reformed Church in the Churches’ Mutual Credit Union.
Summary of Content
Subject and aim(s) / To introduce the Churches’ Mutual Credit Union (CMCU) and encourage URC participation in it.
Main points / ·  Background to CMCU and its aims
·  Extending the CMCU to include the URC
·  URC financial commitment
·  Need for advocacy
Previous relevant documents
Consultation has
taken place with... / CMCU; URC Trust.
Summary of Impact
Financial / An investment of £30,000 in CMCU shares and a £10,000 grant is proposed.
External
(e.g. ecumenical) / The URC would become part of a growing ecumenical initiative which provides practical help to individuals and a principled challenge to unjust financial structures.


Churches’ Mutual Credit Union

  1. The United Reformed Church has a new opportunity to point to the values of the Kingdom of God amidst current financial structures.

Background to the CMCU

2.  Following the banking collapses of 2008-9, internal and regulatory pressures on the banks made them much more restrictive in extending credit to relatively poor risks. This led to widespread difficulties for lower income households in securing credit even for emergency purchases, except by resorting to high interest lenders. One URC response to this was to add the usury clause to our ethical investment policy in 2013.

3.  Meanwhile Justin Welby, as Bishop of Durham and then Archbishop of Canterbury, used his role on the House of Lords review committee on the banking system to challenge the ethics of the high interest lenders, such as Wonga. He announced he would like to compete them out of existence.

4.  One dimension of this was to revive the idea of a credit union, set up and run by the Churches. This could help fill the gap left by the banks’ tighter policies without resorting to the ethics or economics of the high interest lenders. Much detailed work on finding a structure that the regulatory authorities would accept began.

5.  Eventually the Churches’ Mutual Credit Union was launched in February 2015, embracing the Anglican Churches in Britain, the Church of Scotland and the Methodist Church. For various reasons it was not possible for the URC to be a founding partner but a Moderator of the General Assembly was invited to attend the launch and the URC’s interest was explicitly recognised.

Aims and Activities of the CMCU

6. The President of CMCU is the Archdeacon of Dorset, the Revd Antony MacRow-Wood, who is also a past President of the British Association of Credit Unions. He is very familiar with the field and is committed to ensuring the CMCU is in every possible way a model. He has been invited to attend General Assembly for this business.

7. Initially the CMCU only seeks to offer the most basic savings and loan products but hopes in due course to expand its operations, including by providing loans to churches for mission projects. Its facilities can be studied on its website www.cmcu.org.uk.

8. As with any credit union, fundamental to its structure is the “common bond” which links all its members, whether borrowers or savers. Initially this is limited to those with a formal link with one of the founding Churches as ministers, elders, employees or trustees. The longer term ambition is to extend the common bond to all members of participating denominations. It is intended to complement and not replace the many local credit unions that churches and individual Christians have set up and support around the country.

URC Participation

9. The progress of the CMCU has been watched by both the Finance Committee and the URC Trust. The CMCU’s first AGM in January 2016 passed unanimously a resolution to extend the participating Churches to include the United Reformed Church as soon as possible. It is hoped that the wording of a revised common bond to embrace the URC will have been agreed with the regulators by the time Assembly meets. The URC participants should be able to include all ministers and elders, whether serving or not.

10. If Assembly endorses URC participation, we would be expected to join the other denominations in purchasing CMCU shares, which provide a secure capital base and pay a dividend, and in providing a grant to assist with the extra costs of the start-up period. The Finance Committee would find £30,000 for shares from the part of the URC Trust’s investments which is reserved for socially desirable investments which will not necessarily maximise purely financial returns. The Committee would add a £10,000 grant from the Legacy Fund.

11. The Finance Committee and the URC Trust encourage the Assembly to show enthusiastic support for this venture and help it grow beyond its embryonic form. In its first year, the CMCU had achieved over 600 members and assets of over £1.3m. It had been able to extend its first 100 affordable loans, mostly of between £4,000 and £8,000. There were no loan defaults.

Looking Ahead

12. How much impact the CMCU can make largely depends on establishing a track record that persuades the regulators to allow it to widen the scope of its activities. This in turn depends on growing as rapidly as is prudently possible its membership, both depositors and borrowers.

13. If Assembly supports URC participation, every member of Assembly is urged to become an advocate for CMCU and ensure their own church community know of this opportunity to do something practical in the interests of economic justice.

Resolution

General Assembly welcomes the participation of the United Reformed Church in the Churches’ Mutual Credit Union.

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