Agenda item

The committee received a presentation from Catherine Illingworth in respect of the work of Boom! Credit Union.

Boom Credit Union was a not for profit organisation which was owned and controlled by its Members. The organisation was inclusive and anyone who used the Credit Union’s services automatically became a member.

The organisation was built on values such as responsible lending, making ethical choices and the promotion of financial inclusion. This manifested itself, as the Credit Union aimed to make itself accessible to those excluded from high street banks and more mainstream financial providers. In addition the organisation ran services to promote saving and good money management, and ran education workshops on topics such as budgeting. Moreover, Boom! actively campaigned against the services of high-interest payday loan companies and provided an accessible alternative.

The following of Boom!’s services were highlighted:

·         The Boom! facilitated current account, which featured cashback rewards, budgeting tools and a mobile app.

·         The Family Lift Off Loan, which was accessible to those in receipt of Child Benefit. The loan provided a lower interest rate to the organisation’s standard loan, even if the applicant had no credit history.

Arising from the Committee’s questions and comments the following points were noted:

·         It was noted that out of the organisation’s 7,500 members, only approximately 50-100 were Surrey Heath Residents.

·         The Boom! facilitated current account was an ‘Engage’ e-account and Visa Debit Card, which was run by Contis Financial Services Ltd, which subscribed to ethical lending and the values of Credit Unions. The company was registered with the Financial Conduct Authority and the current account was covered by the Financial Services Compensation Scheme (FSCS). Members underlined the importance of the financial secureness of companies which provided financial services to residents.

·         Boom! considered all of the Surrey Borough and District Councils as its partners. However Surrey Heath had not provided Boom! with any financial help since the merger between SurreySave and West Sussex Credit Unions. This was in contrast to some neighbouring local authorities which had provided the organisation with grants.

·         Recent emphasis on ensuring the long-term financial sustainability of the organisation had meant Boom! had not managed to fully develop its work with schools. There was ambition to further develop and include further schools in pocket money saving schemes which had already be undertaken in two schools in Sussex.

·         Despite a previously insecure financial position and the inheritance of bad debts, Boom! was now heading in a upward trajectory in respect of its financial position.

·         Boom! worked in partnership with the Citizen’s Advice Bureau (CAB) and staff had recently visited CAB offices to remind them of the organisation’s services. However, due to the nature of the problems which the CAB’s customers face, only between approximately 10% and 20% of CAB referrals are approved for loans.

·         Whilst Boom! recognised the value of working with Accent Housing in respect of increasing their volume of customers, they often found Housing Associations difficult to build partnerships with.

·         Despite a zero percent current account interest rate, various organisations and individuals had decided to save large sums with the organisation, due to the perception of shared ethical, values with the Credit Union. It was aimed, that on reaching a better financial position, the organisation would be able to run like an old building society and pay savers an annual dividend.

·         The processes for when a Boom! Customer cannot meet their loan repayments, were still evolving. It was emphasised that Boom!, always made a conceited effort to have a verbal conversation with the customer before taking any action. Steps, which had been taken in the past before more assertive actions, had included suspension of interest, write off of debts and extension of payments.

There were concerns in respect of Boom!’s perceived current financial fragility and as a result their potential to be endorsed as a formal Council Partner. On the other hand, some Members affirmed that if an opportunity became available they would like to consider supporting Boom!’s application for a Council Grant in the future. It was stated, that if there was an appetite to support a funding request, a service level agreement would have to be in place in order to allow the Council to openly endorse and support the organisation.