Canon Antony
MacRow-Wood
Churches Mutual Credit Union
Team Rector in Poole
1
CMCU
How Churches can help Credit
Unions and The proposed
Churches’ Mutual Credit
Union Ltd.
Revd. Canon Antony MacRow-Wood ACA
Chair of Shadow board
Presentation to Portsmouth Diocesan Synod 2nd November 2013
The Church of England’s
Current National Strategy
CMCU
• Sir Tony Baldry in answer to a recent question in
Parliament: “The Church of England is developing a
three-pronged strategy in its work with credit unions”.
• The first is to link parish churches to local credit
unions to offer support where any is available.
• The second is to set up an archbishops taskforce to
work with the credit union movement and the local
banking sector to produce credible alternatives which
offer financially responsible products and services.
• The third is the plan to found the Church’s credit
union, primarily for clergy and Church employees.
Part 1; How can Churches
help their local Credit Union?
CMCU
• Be strategic – send someone reasonably
senior to ask what help would be most useful
• Listen to the reply
• Could be: Governance
Capital injection
Savers
Borrowers
Host a Service point
Publicity
How can Churches help their
local Credit Union?
CMCU
Governance:
• Credit Unions are governed by volunteer
directors, Boards can lack crucial skills.
• Our churches have some well qualified people
with financial, business and legal skills.
• Time commitment 1-2 evenings a month
How can Churches help their
local Credit Union?
CMCU
Capital Injection:
• Credit Unions are required to have 3% capital
to assets ratio by September 2014.
• Deferred Shares count as capital but churches
need to do due diligence and have regard for
the advice on C of E website from the
Church’s Lawyers re investments.
• Individuals or churches can make donations
(for churches this has to be in line with their
charitable purposes).
How can Churches help their
local Credit Union?
CMCU
Savers:
• If the Credit Union is well lent out (70% or
more of deposits are out on loan to members).
• Has a reasonably high demand for loans but
is concerned about their liquidity.
• They will welcome people who join and just
want to save.
How can Churches help their
local Credit Union?
CMCU
Borrowers:
• If the Credit Union is not well lent out (less
than 60% of deposits are out on loan to
members).
• They may not welcome more savers as this
will erode their capital to assets ratio.
• They will welcome more borrowers. Christians
should see this like buying fairtrade goods –
you may pay a premium for the ethical choice.
How can Churches help their
local Credit Union?
CMCU
Host (and help run) a Service Point:
• Credit Unions are wary of the ‘Poor Man’s
Bank’ label – don’t want to operate out of tatty
premises.
• Ideal location – out of town estates with no
access to financial services.
• Find volunteers to help run it.
• Wonga’s average loan £178, someone saving
£2 (price of a lottery ticket) a week for two
years would not need a payday loan.
How can Churches help their
local Credit Union?
CMCU
Publicity:
• Help create news stories like the recent visits
of Bishops to credit unions.
• Have posters up and leaflets available in your
church.
• Word of Mouth – be informed about services,
products and access channels so you can tell
people about their local credit union.
Part 2: The Origins of CMCU
CMCU
• 2007/8 Consultation with clergy about
pensions and retirement housing
• It suggested clergy needed a tax efficient
means of saving and a source of affordable
credit (which is what a credit union does)
• Autumn 2009 the Archbishops’ Council
agreed to payroll deduction
• Drafted a Business Plan with the help of an
initial private donation & set about
fundraising
Origins – continued
CMCU
• Positive response from a number of
Dioceses (including Portsmouth)
• Church Commissioners offered a £325k
Subordinated Loan in exchange for taking
over the car loan scheme.
• Catch 22 – most charities wanted to help but
couldn’t - their objects wouldn’t allow it.
• About to mothball the project when new
Archbishop arrived coupled with an
approach from Church of Scotland
Membership would be open to:
CMCU
1. Baptised members of Church of Scotland &
Anglican Churches in GB (or those formally
received into membership) provided that:
• They are ordained or training for ordination or
• They are a Licensed lay minister, or
• They are employed by a CofS or Anglican
Church or Charity, or
• They are a trustee of a CofS or Anglican
Church or Charity
Membership would be open to:
CMCU
• 2. Persons living in the same household as
the above.
• 3. Church of Scotland or Anglican Churches
or Charities based in Great Britain.
• 4. Employees of Ecclesiastical Insurance Co.
• And eventually…..
• Members of an Anglican/CofS Electoral Roll or
equivalent and other denominations
What will the CMCU do for its
members?
CMCU
CMCU will provide:• An easy to use, ethical and accountable provider for
tax efficient saving (ISAs) and affordable credit
• A competitive alternative source of loans for cars,
white goods, holidays and a means to spread peaks
and troughs of general household expenditure
• The capacity to begin saving, improve financial
capability and plan for retirement throughout one’s
working life
• In due course provide mortgages for retirement
housing (ambitions to be a Version 2 credit union)
Strategy for CMCU
CMCU
• By taking on the Car Loan Scheme, coupled
with advantages of Payroll Deduction can
build viable & sustainable business within 3
years
• Concentrate membership recruitment on
those on the central payroll but have direct
debit facility for others as well
• Launch (to the public) with more than 5%
capital so can offer interest on savings
Strategy for CMCU - continued
CMCU
• By including Trustees of Anglican/Church of
Scotland Charities will have members with the
expertise to run it
• Use Fern’s Abacus system with ‘Internet Banking’
so members do as much of their own account
management as possible
• Work in partnership with EIG (complementary
businesses not rivals) and so have access to
office premises at cost and marketing expertise.
Main Points from Surveys
about CMCU
CMCU
• High response rate in all three surveys – 1571
responded to the latest survey (about 10%)
• 585 of whom would join in first 3 months
• Healthy appetite for saving
• Equivalent numbers to current CC car loan
scheme would take car loan
• Reasonable appetite for other loans
• Survey shows we have a viable business so
decision taken to apply for registration
Main Points of Financial
Model
CMCU
• With £260k in grants (and some on going
support in kind) plus £400k in Deferred Shares
can comfortably maintain capital above 5%
(£200k in DFs already committed by CCs)
• Sustainable in Year 3
• Car Loans as %age of total loans decreases in
years 4 & 5 as membership spreads more
widely
• Corporate deposits essential for liquidity
What will the CMCU do for the
Church? – a low cost source of
mission funding…
CMCU
• As diocesan and parish resources diminish, sources
of mission funding will decrease, imagine 10 years
hence:• A parish mission plan calls for a £40k investment in
café facilities at the church
• A Trust fund offers a £20k grant and suggests the
PCC apply for match funding as a loan from CMCU
• CMCU requires the PCC and PCC members to join
and for 10 trustees to act as guarantors of the loan
• Available Trust funds go further and parishes make
better decisions with greater personal commitment
from the leadership - a powerful tool for the future
Timeline to Launch of
CMCU
CMCU
• Just submitted Application to the Regulators
• Continuing to raise start up capital (next 6
months)
• May 2014 Launch liturgy as part of General
Assembly of CofS
• ‘Soft launch’ at General Synod July 2014, begin
trading 1st October 2014