Members of the Manx Credit Union Working Party are urging the Isle of Man Government to speed up their progress on updating credit union legislation after an official Government report has itself recommended the establishment of a credit union for the administration of some social benefits.
The Ci65 Review into the Isle of Man’s Social Security and National Insurance Schemes, which was commissioned by Treasury at a cost of ?775,000, says in summary that the management of some DHSS loans and grants could be carried out by a Manx credit union which would free up DHSS staff for other departmental activities.
It further suggests there is potential for Government to consider using some of this lending “as seed corn funding for the development of a credit union” and that using a credit union would help those on low incomes and benefits “access low-cost finance and help them manage their finances better”.
Manx Credit Union Working Party chairman David Talbot comments: “This report supports our belief that a credit union has a key role to play in our community. There is clear public demand for it on the Island and off-Island professionals, such as Ci65, can also see its potential. Further assistance could be given to Government through administrating student and ‘green’ loans.
“It seems it is only our Government who does not recognise the benefits and we hope that this report will spur them on to address the need for a workable Credit Union Act as a matter of urgency. We know the Financial Services Commission has put its recommendations regarding amendments to the legislation to Treasury, and we would call on the Treasury Minister to review these and move to public consultation as soon as possible.”
Meanwhile the integrity of payday lending schemes has once again been questioned this week following the revelation that the IOM Office of Fair Trading has suspended the registration of an operator incorporated in the Isle of Man. Although this lender was working in the American market and not on the Island, it charges interest rates of up to 365% per annum, highlighting the excessive costs imposed on people who are struggling to make ends meet.
“Failure to offer a positive alternative, such as a credit union, could damage the Island’s image as ‘a good place to live and do business’, a campaign in which our Government has heavily invested,” adds Mr Talbot.
