Islay and Jura Credit Union

What is a Credit Union?

Credit Unions are financial co-operatives owned and controlled by their members.  They offer savings and great value loans.  They are ethical, and because they are local, they know what their members want.  Credit Unions are one of the financial world's best kept secrets; they have been around a long time, in many countries, but they are only now being widely recognised as an excellent way to make good use of your money.

Members of a Credit Union are united by a Common Bond; in our case, members live or work on Islay or Jura.

The Credit Union is managed by a volunteer Board of Directors.  All officers of the Credit Union are ordinary members, who are elected to office by the membership at the Annual General Meeting.  All members of the Credit Union have one vote, regardless of the size of their savings.

The members of a Credit Union pool their savings together; these savings then provide the funds from which loans can be made.  From the interest it gets from loans, the Credit Union must pay its operating expenses and make a profit so it can put some money into reserves and eventually pay a dividend.

All profits from a Credit Union go towards developing the business or are returned to members as a dividend; the only shareholders in a Credit Union are the members who use its services.

Saving money with a Credit Union couldn't be simpler.  Unlike some other savings schemes, you can save as much or as little as you like, weekly, monthly or as often as you wish.  You can pay in at Collection Points, or direct from a bank account by Standing Order.  Life savings insurance is included at no cost to the member.  After saving for a short period, members become eligible to take out loans, based on the amount they have saved.  As a “not for profit” organization, the Credit Union is able to provide low interest rates on these loans.

Credit Unions are regulated by the Financial Services Authority, in the same way as banks and building societies.  The savings of Credit Union members are protected by the Financial Services Compensation Scheme, a safety net for customers of financial firms.  All savers with credit unions have 100% protection from the FSCS for the first £50,000 of their savings. This is the same level of protection that customers of banks and building societies enjoy.  In addition, all Credit Unions must be affiliated to a professional body, in our case the Association of British Credit Unions Ltd. (ABCUL).  All business is conducted in the strictest confidence and each elected officer and volunteer must sign a pledge of secrecy that is binding for life.

Islay & Jura Credit Union

A customer is served at Port Ellen Collection PointIslay & Jura Credit Union is run entirely by volunteers.  They staff two Collection Points where members can pay in or transact other business.  One of these is in Bowmore and the other in Port Ellen.  As the Credit Union expands and gains more members and volunteers, additional Collection Points can be set up in other parts of the islands to meet local demand.

Membership is open to anyone over the age of 16 who lives or works on Islay or Jura, although members under 18 are not eligible for loans.

Important information about compensation arrangements

We are covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to depositors if a credit union is unable to meet its financial obligations. Most depositors - including most individuals and small businesses - are covered by the scheme.

In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the credit union, including their share of any joint account, and not to each separate account.

For further information about the scheme (including the amounts covered and eligibility to claim) please ask at your local branch, refer to the FSCS website or call 0800 678 1100.