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Frequently Asked Questions


General

Is my money safe?

Is the credit union insured?

Who runs the credit union?

Are there any hidden costs?

Why do I have to pay an entrance fee?

Is my private information safe?

What is a regulator?

If I feel that the credit union has acted unfairly can I complain and how?

What is a 'common bond'?


Savings

Can I withdraw my savings?

Do I get interest on my savings?

Can my children save?

Can my children withdraw?

Can I control my children's access to their accounts?

What happens to my savings if I die?


Loans

Must I have extra insurance if I borrow?

Will I pay a fee if I pay my loan off early?

Can I change my payments if my circumstances change?

Can I use my savings to clear or reduce my loan?

Can I take money out of my account while I have a loan?

Can my children borrow?

What happens to my loan if I die?



General

Is my money safe?

Each member's savings are protected by law up to the value of £85,000 (until 1st January 2016, when the protected value reduces to £75,000).  This means that if anything happened to the credit union every member would be compensated for all their savings up to £85,000, then £75,000.  As the maximum savings that each member can hold is £15,000 all savings are safe.


Is the credit union insured?

All credit unions must by law have a special insurance to protect against loss, theft and fraud. It is called the Fidelity Bond.


Who runs the credit union?

The credit union is owned and  run by its own members.  Anyone with £1.00 in their accounts can vote at the Annual General Meeting, volunteer, or stand for election.  No individual in the credit union may profit as an individual from being involved.



Are there any hidden costs?

You will be asked to pay an entrance fee of £2.00 when you join, and £2.00 each year on 1st October.  This date is the beginning of our financial year and the £2.00 fee each year helps the credit union with some of our costs.


When you borrow you will be told how much interest will be charged.  There are no other costs involved in the loans.


 If you join the bill-payment scheme your account will be charged 0.10pence per week whether you want to pay 1 bill or 6.

 

Why do I pay an entrance and annual fee?

The credit union has many expenses.  One of them is to our trade body, ACE.  ACE keeps us informed of changes in legislation and supports us through these changes, but for this service we have to pay an annual fee.  This accounts for most of the money collected as annual fees.


Many members' transactions involve telephone calls and postage and the fees help us to cover the costs which amount to about £4,500 annually.


Is my private information safe?

The credit union must abide by regulations on data protection and satisfy the government's Information Commissioner every year that we keep proper files and make sure that we only hold information that you know about and that is relevant to your account.


 No-one may access any  information about your account or anything else unless you give specific permission for them to do so.  This means that you can sign a request for a relative to be able to withdraw or ask for a statement.  But otherwise no-one has any rights over your account.


The only exception to this is if the police or other government agency makes a written request  for information.  In this event the credit union has a legal obligation to co-operate but you would be told by us that the request had been made unless there was an overwhelming reason not to do so.


No private organization such as a bank, other lender, or landlord can ask for information without your  knowledge and written prior consent.


You can ask for a password that is unique to you.


A credit union worker, paid or unpaid, who deliberately gave information without proper consent would be disciplined.


What is a regulator?

Our regulators are the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA).  They determine the legal framework in which we operate and we have to account to them every quarter and every year, through financial reports and properly audited accounts.


Their rules ensure that we operate legally and fairly.


We are also regulated by the Financial Ombudsman Service which monitors the way we deal with members' complaints.  It is your last resort if you have a complaint against us.


The Financial Services Compensation Scheme requires the credit union to maintain accurate records so that in the event of a failure your savings can be re-imbursed to you fully and promptly.


What happens if I have a complaint?

We hope that most complaints can be dealt with by the worker that you contact or speak directly to in the first instance.  You may make a complaint verbally, by telephone or in writing.


 If you are not satisfied, the worker must record your complaint or invite you to put it in writing and pass it on to the complaints officer.


You must have an acknowledgement from the complaints officer within one week and she must give you a response within the following 3 weeks.


If after another 4 weeks you are not satisfied with the response, the credit union will give you the information to apply to the Ombudsman Service.


What is a 'common bond'?

We describe the area in which the credit union operates as the common bond.

For us it is the geographical area in which someone who wants to join must live or work.

Legally we can only accept applications to join from people who live or work in the post codes of the inner city, out to Handsworth, One Stop in Perry Barr, south and west to the grounds of Birmingham University and Harborne and east to Nechells.

Workers include students, school children and volunteers.

If you do not live/work in these areas we can direct you to a credit union that would accept your application.

If you move out of the are you may (within certain limits) keep your account open with us.


Savings


Can I withdraw my savings?

Yes, your savings are your own and you may withdraw at any time unless you have a loan.

If you have a loan secured by savings you must leave a minimum value in your account as security.  This value is explained to you when you take out your loan.  Any money above that minimum may be withdrawn.

You may withdraw in cash (small values), a cheque to change immediately at a local post office or through your own bank account, or as a bank transfer to your own bank account.


Do I get interest on my savings?

If the credit union can generate enough profit through the year it must be distributed to the members as a dividend.  However in recent years our running costs have been so high that we have not been able to do so.


Can my children save?

You can open a savings account for your child or children from their birth until they are 18 years old.  If they are over 7 they can open one for themselves.

You or they can save in cash, cheque or by a standing order from your bank account into their credit union account.

If you have a regular income coming directly into your account ie child benefit or tax credits, you can ask some of it to be diverted into your child's account.


Can my children withdraw?

Yes they have a right to withdraw after they are 7 years old.


Can I control my children's access to their accounts?

When you open a child's account you can request on the application form that only you have right of access to the account until they are 16.  After that they may withdraw for themselves.

Legally, if you have not made that request, they may access their account from the age of 7.


What happens to my savings if I die?

When you complete your application for membership, you will be asked to name a next of kin - someone who you would want to inherit your money.

The credit union pays an insurance premium on each member's behalf, so that (subject to conditions) a payment in addition to                 the savings balance at the time of death will be made to the named person.

The credit union cannot keep your money - we must have a named person to inherit it.

You may change the person named on your original form at any time.



Loans


Must I have extra insurance if I borrow?

No, but it is possible to ask for additional cover against accident or unemployment.  However this would be an additional cost.


Will I be charged if I pay my loan off early?

No.  The only payments you make are your agreed repayments that include the interest.

If you clear the loan early, you will only pay whatever interest is outstanding on that date.  So for instance if your loan balance is £100 and you usually pay in weekly instalments but want to clear it all at once - you will pay £100.00 plus 0.35p (one week's interest).


Can I change my payments if my circumstances change?

Yes.  You may re-set your payments if you want to pay it off more quickly.

If you have a loss or reduction in your available income, we encourage borrowers to re-arrange their loan payments as soon as possible.


Can I use my savings to clear or reduce my loan balance?

Under some circumstances.

If your savings balance is above your loan balance you may clear it with your savings or reduce the loan.

But you cannot use your savings to pay off the loan until your loan balance is down to the level of your savings.

You must keep the amount that you used to secure the loan in your account until the loan is below that value.

If in doubt, please ask at the office.


Can I take my money out of my account while I have a loan?

You may withdraw any amount that is in excess of the money you needed to secure the loan.

So if your loan balance is £500, and you had £250.00 in your account to secure it, but now have £300 in your savings, you may withdraw up to £50.00.


Can my children borrow?

No.  The minimum age for borrowing is 18, and at that age, your children would have to become adult account holders, and start saving for themselves.


What happens to my loan if I die?

The insurance that the credit union pays on members' behalf, to protect the savings and which is free to members, also covers loans for members up to the age of 80.

Subject to conditions, the loan balance would be cleared by the insurance and no-one would inherit the debt.

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