Section 9: Affordable Credit

Leeds Credit Union Growth since 2005

Leeds Credit Union (LCU) has its origins as a City Council credit union, open to membership for all City Council employees and their families in 1987.  Since that time, through changes to the common bond (the area under which individuals are eligible for membership) and mergers with other community based credit unions LCU came about, in its current form, around the year 2000.  It is now one of the largest “live and work” city based credit union in the UK.  Membership is open to anyone who lives or works in the Leeds metropolitan district and their families

Table 9.1

Leeds Dec-18 Dec-17 Mar-05 Annual Change Dec 2017-18 Growth since 2005
No % No %
Total Members 30,815 31,596 12,655 -781 -2% +18,160 +144%
Total branches 6 6 2 0 n/a +4 n/a
Information Points 2 2 0 0 +2
Loan Shops 3 3 0 0 +3
Source: LCU Quarterly and Archive Reports to LCC, Jan 2019

Following the launch of the City Council’s Financial Inclusion Strategy in 2005 a programme of branch expansion was initiated with the aim of providing credit union facilities in Council One Stop Centres and Housing Offices.  This increased the number of branches from 2 in 2005 to 6 full service branches and 2 information points by 2016. LCU opened a Loan Shop on Roundhay Road in 2014, The Compton Centre in 2015 and Merrion Cenre in 2017. Membership in Leeds branches has grown from almost 13,000 in 2005 to over 30,000 by Dec 2018 at a rate of 144%.

Leeds Credit Union Latest analysis

Table 9.2

Leeds Quarter to Dec 2018 Quarter to Dec 2017 Annual Change
Total Members 30,815 31,596 -781
Total Number of loans 2,009 1,871 +138
Total Value of new lending £1,796,921 £1,635,694 +£161,227
Total Loan Book for Leeds £6,678,887 £7,779,929 -£1,101,042
Source: LCU Quarterly Reports to LCC,  Jan 2019

LCU had 30,815 Leeds members as of Dec 2018, down by 781 members in Dec 2017.  They provided over 2,000 new loans in the quarter to Dec 2018, up by 138 loans on the previous year. LCU’s loan book for lending fell to £6.7m, down £1.1m on 2017.  Rates of interest on loans will vary depending upon the amount, term and security but cannot be more than 42.6% which is a legislative rate cap for credit unions.

Headrow Moneyline Lending

Table 9.3

Leeds Total Jan-Dec 2018 Total Jan-Dec 2017 Annual Change
Total Number of new loans 1,219 1,421 -202
Value of loans £488,970 £661,550 -172,580
Average loan value £401 £466 -65
Average monthly interest 5% 5% 0
Month End Loan Book £313,559 £486,160 -£172,601
Number of loans in book 2,025 1,651 +374
Source: LCU Quarterly Reports to LCC, Jan 2019

Between Jan-Dec 2018, HML provided 1,219 new loans. The total value of these loans over the year has come to £488,970.  The average loan is for £401. The month end loan book totalled £313,559 and the total number of loans in the book by Dec 2018 was 2,025.  Headrow Money Line is not governed by credit union legislation and is therefore free to set its own rates of interest. Most loans are currently set at 79% APR.

Further Information: Leeds Credit Union and Headrow Money Line

In November 2012 LCU Established a CDFI (Headrow Money Line). LCU does not charge additional fees if payments default. Their interest rates are capped by Credit Union legislation. As of April 2014, credit unions can charge a maximum of 42.6% and LCU have begun charging this rate for new small loans below £1000, however the standard APR for a LCU loan is 26.8%.  If people are declined an LCU loan due to a marginal credit rating, they are asked if they would like to be referred to Headrow Moneyline.  Headrow Moneyline is a CDFI, they are a sister company to LCU and do not charge fees if payments default. With an APR of 79%, they are able to provide loans to more people and help them re-build a credit history so that if they need to borrow again, they can be referred to cheaper options of credit, such as being referred back to the credit union.