Thursday 3rd July, 2014
Project Credit Union - Day 7
The Co-op’s credit union bank account
We spoke to the Co-op about their Community Directplus bank account. I think this is the bank account that quite a number of UK credit unions use, including both the London Capital and London Community credit unions that James and I have joined.
The Community Directplus account offers:
- Free banking for organisations with a turnover of up to £1,000,000 and annual deposits of up to £100,000.
- Interest payments on credit balances over £2,000.
- Access to the Co-op’s business online banking.
It currently takes around two weeks to open this account so I don’t think we have to worry about this becoming a bottle neck should we end up wanting to open one.
We were also told about the Co-op’s FD Online software that they offer as a paid alternative to business online banking if we have more specific requirements.
We later spoke to the Co-op’s credit union relationship manager and asked whether he knew how the existing credit union software packages (e.g. those from Progress and Kesho) integrated with the Co-op. He thought that they might rely on the credit union having paid for FD Online but he was going to find out for sure and get back to me.
Credit union current accounts
The news about the credit union current accounts wasn’t quite as positive as we were hoping. In short, they are still being offered through ABCUL but it sounds as though they’re quite expensive to run. I wasn’t able to get exact details as we’re not a member of, or a study group with, ABCUL, but it sounds as if it would be unrealistic for a credit union to offer current accounts from day one because of the high operating costs.
We’re keen to understand exactly how much the current account costs to operate so we think we’ll have to register to become an ABCUL study group. It seems slightly odd to me that this information isn’t publicly available.
This information about the current account was confirmed by Dawn from UKCU who explains that it’s only really the largest, most wealthy credit unions that offer the current account. There is a possible alternative in the credit union prepaid debit card but we need to investigate this further.
The representative at ABCUL talked a little about the Credit Union Expansion Project, and how that might provide alternative current accounts. I haven’t read too much about this project so I’m not sure we’d hold our breath for anything emerging anytime soon.
We’d quite like to form a study group with UKCU given how helpful they’ve been to date. Unfortunately, as mentioned above, we’ll probably need to go with ABCUL so that we can get the information about current accounts that we’re interested in. I guess we might be able to form a study group with both organisations but it’s not obvious whether it’s possible.