Bill Wilson MSP

MSP BACKS JOHNSTONE CREDIT UNION CALL FOR END TO INIQUITOUS FINANCIAL SERVICES COMPENSATION SCHEME LEVIES

Dr Bill Wilson, SNP MSP for the West of Scotland, has attacked the levies that have been applied to credit unions by the Financial Services Compensation Scheme.

Dr Wilson said:  “I have been approached by a constituent of mine, Mr Tom Kelly, who is the treasurer of Johnstone Credit Union and who is deeply concerned at this UK-wide policy.

“It is unjust that these small organisations that have been lending responsibly should be penalised by the Financial Services Authority due to the failures of the big banks.  Credit unions have worthy social aims in that they generally operate on a non profit making basis, employ volunteers and extend finance at reasonable rates to those who would otherwise struggle. They should not be punished by the unsustainable business practices of the major banks. ”

The levies are to be collected from banks, building societies and credit unions in order to re-pay the UK Government for the money it gave to the Financial Services Compensation Scheme as a result of the failure of five UK banks. The amount owed is adversely affected due to the large amount of ‘toxic debt’ that exists on these banks’ balance sheets.

Mr Kelly commented:  “The imposition of this levy on credit unions, is a perfect illustration of the damage being inflicted on communities throughout the UK by what Lord Turner of the FSA describes as the ‘socially useless’ innovations of the mainstream banking sector. It is incredible that small voluntary organisations should be expected to pay for the misdemeanours of these socially irresponsible banks. The banking sector should be asked to relieve credit unions of this burden.”

Notes to Editors

· Credit unions aim to extend finance to those who would otherwise have difficulties.

· In 2008 the UK Government gave £19.7 billion to the FSCS. 

· The FSA has sent invoices to credit unions in Scotland, demanding the interest and administrative fees for the amount they owe.

· Letter from Tom Kelly of Johnstone Credit Union to Mr John Swinney

· Letter from Dr Thomas Huertas, Director of the Banking Sector of the Financial Services Authority, to Mr Peter Goth of the Scottish League of Credit Unions