Public and Commercial Services Union

What are you committing to?

PCS Credit Union is a financial co-operative where members pool their savings and lend to each other.

The credit union has been established by PCS trade union as a vital practical benefit to members. As a democratic co-operative, owned and run by its members, for its members, PCS Credit Union is based on the same principles of self-organisation and mutual interests as the trade union.

By completing an application form, you are committing to save regularly  in a safe and ethical way. These savings will then be pooled to provide low cost loans to other members, as and when they need them. By saving together and loaning out to each other, the credit union will have no external shareholders only interested in the bottom line. Costs are kept low and all surpluses are ploughed back in as benefits to members – in the form of affordable loans and dividends on savings balances.

Membership

Membership of PCS Credit Union is open to all those in the credit union’s ‘common bond’. This is made up of the following: Ordinary, Associate and retired members (which includes PCS staff and full-time officers) or Life members of the Public and Commercial Services Trade Union and their household family members. Membership status will be checked using the PCS trade union membership database. If your circumstances change, and you no longer fall within this common bond, please contact PCS credit union HQ for guidance.

Fees

The Board of Directors have decided to impose a small membership fee  to cover the initial administration costs of enrolling a member. In subsequent years, a small annual membership fee will be charged as a contribution towards ongoing administration costs. We will advise you of the amount of this membership fee when we contact you about taking the first deposit. Current fees are available from the website and from credit union HQ.

Junior savers

Household family members under the age of 16 years can save with the PCS Credit Union but would not be a full member. From 16 years of age young people are full members, but they cannot apply for a loan until they are 18 years old. Further details are available from the website or from credit union HQ.

Identity and address verification

In order for you to become a member, we are required by law to validate your identity. To minimise the inconvenience to you, we will normally undertake electronic searches with appropriate organisations – this is not a credit check, though details of the search will be recorded by the agencies.

If we cannot verify your identity and address electronically, then we will contact you for hard copies of your identity documents.

We know that some PCS members may have protected identity status, if you have any concerns about this, please contact credit union HQ.

Data protection statement

In accordance with the principles of the Data Protection Act 1998, we will use your personal details for the purposes of managing your accounts with PCS Credit Union. Your personal data and any photocopy documents are held securely by the credit union. All information we hold about you will be treated confidentially and will only be shared with other agencies for the purposes of identity verification. Your details will not be sold to any third parties. If you apply for a loan with us, we may undertake searches about you with credit referencing agencies but we would ask your consent to this in the loan application process.

Building up savings

By completing your membership application form, you are committing to save at least £10 each month for the duration of your membership. This will be collected by direct debit, on the date you select, which is why we ask for your bank details on the application form. Credit union savings are often called shares. £1 equates to one share in the credit union. No share certificates are actually issued to members.

PCS Credit Union operates a dividend system instead of paying interest on members' savings. This means the Board of Directors provides a recommendation to members, once a year at the time of the annual general meeting, whether a dividend should be issued and the percentage it should be. This is based on the surplus generated by the credit union's activities throughout the year. It is anticipated that any potential dividend payments in early years will be limited to allow increases in credit union reserves. Any dividends will be paid directly into members’ credit union savings accounts.

Members can make payments to the PCS Credit Union by direct debit. Although the minimum payment is £10 each month, the monthly amount can be much higher and lump sums may also be deposited. All deposits should be made by direct debit but in special circumstances a cheque made payable to PCS Credit Union Ltd could be accepted.

The maximum savings that a member can have varies according to the size of the credit union. PCS Credit Union's current savings limit is £10,000.

Members are required to complete a savings withdrawal form to give formal notice to the credit union of their wish to withdraw savings. The credit union will arrange for the funds to be deposited into your current account or in special circumstances a cheque sent. However, PCS Credit Union will also have arrangements in place to respond quickly, if a member needs access to their savings or a loan in an emergency. Members will be able to manage their accounts by contacting PCS credit union HQ. It is anticipated that members will be able to manage their accounts online in the future.

Loans

After depositing savings for 3 months, you will be eligible to apply for a loan. It should be noted that you will only be able to withdraw savings in excess of the outstanding loan amount. The amount that PCS Credit Union will loan you will be dependent upon several factors; your savings record, the purpose of the loan and your ability to repay. Each member's circumstances will be considered on an individual basis.

The aim of credit unions is to encourage saving, be responsible lenders and promote financial inclusion. Therefore where members may have a poor credit rating, county court judgements or other financial problems, these will not automatically prevent a member from having a loan but the present financial situation of the member must be fully investigated before deciding whether a loan can be granted and at what level. The granting of small loans and their subsequent repayment can also assist members who may have a poor credit rating to improve their credit status.

It is anticipated that, for at least the first year of operation, loans will be limited in size, quantity and term. This will allow the credit union to build it's reserves and establish a strong foundation for the future. Current legislation limits the maximum amount that a credit union of our size can lend to £7,500.

Credit unions vary in the interest they charge on a loan but the maximum amount allowable under law that credit unions can charge is 2% per month (APR 26.8%) on the declining balance. Many credit unions charge 1% per month (APR 12.68%). For a loan of £1,000 repaid over a year at 1% the interest charge would be £67. This compares very favourably with the interest charged by door-step lenders which can be as high as over 200% APR if taking out a loan. Unlike some other financial institutions, there are no hidden charges. Interest is charged on loans on a monthly reducing balance, so there are no penalties for repaying a loan early.

By law the maximum repayment period is five years but usually loans will have to be repaid within one to three years.

Further information on loans is available from the website and PCS credit union HQ.

Run by members for members

PCS Credit Union is run by its Board of Directors who serve as a liaison between the membership and their credit union. Their role is to ensure that sound management practice is used in the running of the credit union. Working with the Board are the Supervisory Committee who provide an internal audit function. They ensure that the credit union operates eithin the law, the rules and policies of the credit union and in the interest of the members. All of these officers are volunteers and are members of the credit union. PCS Credit Union will also have a small team of staff to provide a professional service and deal with the day-to-day financial transactions. Significant face to face contact with members is undertaken on a local basis by a team of volunteer local co-ordinators.

The Board of Directors has strategic responsibility for organising and controlling the business of PCS Credit Union responsibly and effectively. The Board meet on a regular basis to monitor the performance and financial affairs of the credit union.

Members of the Board of Directors perform key roles for the credit union such as Chair, Secretary and Treasurer. Each Director also undertakes a Regional Co-ordination role, supporting the Local Co-ordinators in their region.

The Supervisory Committee undertake regular checks on the practices of the credit union and report back to the Board on their findings. They ensure the credit union acts in accordance with the law and PCS Credit Union's rules. In addition they report to the AGM on their findings during the year.

Local Co-ordinators actively promote the credit union using a range of methods within workplaces and at local events. They also answer queries from both members and potential members.

Annual general meetings

These meetings are open to all members. Reports on the credit unions financial accounts, and progress over the previous year are considered. Members vote to elect Directors and Supervisory Committee members, vote on any annual dividend to be paid and agree new or amend existing policies. Members may also propose resolutions.

Special general meetings

In exceptional circumstances there is also provision for members to call a special general meeting. Upon application signed by one tenth of the total number of members of the PCS Credit Union or 100 members, whichever is the lesser number, the Board must convene a special general meeting of members, provided the application states the business to be conducted at the meeting.

Protection of members’ funds

PCS Credit Union is authorised and regulated by the Financial Services Authority (FSA) which also regulates banks and building societies. Credit unions have to provide regular reports each quarter and annually so that the FSA can monitor the way that the credit union is being run.

A credit union’s accounts have to be audited each year by an independent chartered accountant in addition to the internal audits performed by the Supervisory Committee and the quarterly and full annual returns made to the FSA.

Credit union members have two additional forms of protection:

Insurance

PCS Credit Union has insurance, which is provided at no cost to you, to protect members money. This includes protection for you in the event of fraud or dishonesty, as well as covering loan repayments in the event of your death.

Financial Services Compensation Scheme (FSCS)

PCS Credit Union is 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 organisations where joint accounts are available 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 call us on 020 7924 2727 or ask your local representative, refer to the FSCS website or call 0800 678 1100.

Complaints procedure

PCS Credit Union has an agreed complaints procedure to respond to any concerns raised by members as well as a named person to deal with complaints. It is advisable to use the credit union’s complaints procedure to try to resolve a complaint. If a member is not satisfied with the response to a complaint, the complaint may be referred to the Financial Ombudsman Service.

In the event of any complaint, please contact credit union HQ in the first instance. Further information on the complaints procedure can be found on the website or be obtained from PCS credit union HQ.

Confidentiality

PCS Credit Union is covered by the Data Protection Act 1998, which prevents the unauthorised disclosure of information about members’ accounts.

All volunteers and staff of PCS Credit Union have to sign a confidentiality agreement, which is binding even if they cease to work for the credit union, to maintain confidentiality about members’ accounts and all aspects of the credit union’s operations.

Senior officers, including members of the Board of Directors and Supervisory Committee also have to be approved by the FSA to ensure that they are "fit and proper".