Newsletter - London Mutual Credit Union

LMCU Newsletter 2014 final:Layout 1 03/04/2014 23:19 Page 2
Newsletter
Spring 2014
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News update
Councillor Sarah Hayward, Leader of Camden Council,
opening our Camden branch
HRH the Duchess of Cornwall signing
the visitor’s book at Heaton Road
There has been a lot of interest
and a lot of news coverage about
credit unions over the past year and,
as the largest credit union in London,
LMCU has featured in newspaper
articles and television interviews.
We have also had a lot of
distinguished visitors, all keen to see
what we are doing in our community,
including HRH The Duchess of
Cornwall, the Bishop of Southwark,
The Rt Reverend
Christopher
Chessun,
Ed Miliband, the
Leader of the
Labour Party,
Lord David
Freud, the
Welfare Reform
Minister, Harriet
Harman MP and
Lord Kennedy of
Southwark.
Camden update
Since we merged with Camden Plus
Credit Union last year membership
amongst the residents and workers in
Camden is growing steadily. If you
are a Camden member, please tell
your family and colleagues about the
credit union and what we can offer,
particularly safe savings and ethical
and affordable loans.
Ed Miliband and Harriet
Harman showing their
support for credit unions
The Rt Revd Peter Wheatley, Bishop of Edmonton, becoming a
member of LMCU
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Upgrading our branches
It’s hard to believe we’ve already
been in the new head office building
in Heaton Road for a year. It’s a great
working environment for our staff
and we know that the members
appreciate the new facilities.
We are planning to refurbish the
branch on Denmark Hill soon to the
same high standard – we believe
it’s what both our members and
staff deserve.
Martin Lewis and Heather Crawford, President of LMCU
In November we held an event to
launch credit unions services to all
those who work in the Palace of
Westminster, which includes the House
of Commons and the House of Lords,
hosted by the All-Party Parliamentary
Group on Credit Unions and London
Mutual Credit Union, and was
attended by numerous supporters of
Credit Unions and LMCU in particular.
Martin Lewis from Moneysaving Expert
who attended the launch has also
joined LMCU as a member. We were
very fortunate to be able to welcome
guests to the beautiful historic
Speaker’s House, with its original Pugin
decoration and furniture.
The Denmark Hill branch will be
closed for a short while during the
refurbishment, but members will be
able to access the services at our
other branches or on-line.
More employers offering
payroll deduction schemes
Following the visit of HRH Duchess of
Cornwall last year, staff employed at
Clarence House and Highgrove are
able to join the credit union and save
direct from their pay. Other
employers who have recently joined
the scheme are the Royal Free
London NHS Foundation Trust, House
of Commons and House of Lords, and
the Independent Parliamentary
Standards Authority, IPSA.
London Living Wage
We are proud to say that all
our employees are now receiving
the London Living Wage. The Living
Wage is independently calculated
according to the basic cost of living in
the UK.
We are fortunate to have a
dedicated and professional staff to
look after our members and help
them access the services of the credit
union and the Board feels that paying
them the London Living Wage reflects
their contribution to the credit union
and the members.
Lord Kennedy of Southwark, Damian Hinds MP,
Martin Lewis and Directors of LMCU
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On-line
services
We are always
looking at
ways to
expand our
on-line
services – it is
convenient for
members who can’t get to a branch
easily and helps us to operate
efficiently. Once you have registered
for CU on-line you can access the
majority of our services at any time.
Member Services
New mobile app
We have introduced our new mobile
App for those of you who want to
access your credit union on the go.
The App is for Apple iPhone, iPad and
Android devices and you can
download the App now. Before you
do, make sure you are registered for
on-line services – you can do this
quickly and easily at creditunion.co.uk
You can also email us at
info@creditunion.co.uk and you can
still check your balance by text – just
text bal to 60060 – make sure you let
us know if you change your mobile
number as we need your current
number for you to access this service.
Accounts are updated at 10.00am
and then every two hours after that,
so don’t text before 10.00am for
money due on that day.
Some of the features included on the
App are:
check your account balances
view transactions
move money
send a message to LMCU
request a statement
apply for a revolving loan top up
request your log in details to be
changed
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Recycle our rubbish and make sure
we don’t waste paper or other
resources. We have signed up with
local authorities for special
collections of paper for recycling.
News about your next
newsletter and statement
We are changing the date we send
out your annual statement and
newsletter – you’ll receive your
next newsletter in January 2015
and the reason for this is so that
we can include the date and other
relevant information for the
Annual General Meeting.
You can help us to cut down on the
amount of paper we use by signing
up for our on-line services and
receiving your statement and
newsletter by email – this not only
saves paper, but money too on
printing and postage. More than
4000 members are already signed
up to be Green members – just
email us at info@creditunion.co.uk
and let us know that you would like
to be a Green member and we will
do the rest.
The AGM is held in February each
year and we want as many members
as possible to come along and take
part – this is your credit union!
We’ll announce the date and venue
in the newsletter, so please put it in
your diary and come along if you can.
Debit card payments
Help us get
greener
You can use your debit card to make
payments to your credit union
account – for savings or to make an
extra payment off your loan –
remember, there are no penalties for
paying a loan off early. Just visit our
website and click on card payments.
We are working
on our own Eco
policy for our
business and it can probably be
summed up in three words – reduce,
re-use or recycle.
Reduce energy consumption in our
offices, transport costs by buying
local where we can, paper by using
email and text. Our new head office
at Heaton Road is fitted with a
number of state of the art energy
saving devices.
Re-use by refurbishing buildings or
equipment whenever possible and
sending items we don’t need to a
local equipment exchange service, so
our unwanted furniture, computers
and empty cartridges are donated to
organisations for re-use.
Visit us on Facebook and
Twitter
If you are on Facebook then please
visit our page for all the latest news
and don’t forget to ‘like’ us!
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Pay day loans
Since we
introduced our
Pay Day Loan two
years ago we have
been able to help many of our
members to break the cycle of
borrowing every month to make it to
the next pay day.
Money matters
ISA
We are not opening new ISA accounts
as we have reached our ISA targets, but
our members who already have a
London Mutual ISA account will benefit
from our new rate for 2014/15 of
2%AER. You can deposit up to £5,940
during the 2014/15 tax year.
If you need a small amount of money
fast you can apply on-line and have the
option of getting the money the same
day, and because our Pay Day Loan can
be paid over three months you can
spread the repayments so you’re not
back in the same situation next month.
Dividend
You can pay up to 5853% APR for some
pay day loans – compared to just 42.6%
APR with CUOK!
At the AGM on 19th February 2014 a
dividend for the year of 1% was
approved and this has been credited to
members’ accounts. This compares very
well with the high street banks at the
moment.
Please note that the dividend is paid
gross and no tax has been deducted. As
always, it is your obligation to declare
all your earnings to the HMRC,
including the dividend received, and
pay the correct tax. London Mutual
Credit Union is required to report to
HMRC dividends in excess of £15 paid
into your credit union account.
Borrow
Monthly
Interest
London Mutual Credit Union
£400
£12.00
42.6%
Typical Pay Day Loan
£400
£125.48
4214%
Savings
Some members have asked us why they
can’t withdraw savings while they have
an outstanding loan. The answer is very
simple – as a savings and loans
co-operative, we need members’ savings
to make loans to other members! If
everyone withdrew their savings we
wouldn’t have funds to lend out.
Junior account and Child
Trust Fund
For the fifth year running we have
declared a dividend of 5% on our
Junior and Child Trust Fund accounts.
We believe in encouraging children to
save and learn about managing money
for the future.
Furthermore, if you apply for a loan the
amount you can borrow is directly
related to your savings at the time, which
are used as part security for the loan.
Once your savings are equal to your
loan you can use them to clear the loan
if you want to – there’s no penalty for
clearing a loan early.
Important information about compensation arrangements
We are 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 joint accounts 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
ask at your local branch, refer to the FSCS website http://www.fscs.org.uk/ or call 0800 678 1100.
6
APR
acquired by us in the course of performin
Independent Auditor's Report to
the Members of London Mutual
Credit Union Limited
We have audited the financial statements of
London Mutual Credit Union Limited for the year
ended 30th September 2013 which comprise of the
income and expenditure account, the balance sheet
and the related notes. The financial reporting
framework that has been applied in their
preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
Respective responsibilities of directors and auditors
As explained more fully in the Statement of
Directors' Responsibilities set out on page 1 the
directors are responsible for the preparation of
financial statements which give a true and fair
view. Our responsibility is to audit and express an
opinion on the financial statements in accordance
with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the
amounts and disclosures in the financial Statements
sufficient to give reasonable assurance that the
financial statements are free from material
misstatement, whether caused by fraud or error.
This includes an assessment of: whether the
accounting policies are appropriate to the credit
union’s circumstances and have been consistently
applied and adequately disclosed; the
reasonableness of significant accounting estimates
made by the Board of Directors; and the overall
presentation of the financial statements. In
addition, we read all the financial and non-financial
information in the Directors' Report to identify
material inconsistencies with the audited financial
statement and to identify any information that is
apparently materially incorrect based on, or
materially inconsistent with, the knowledge
7
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Revenue account for the year ended 30th September 2013
Note
2013
£
Income
Entrance Fees
Interest from Loans to Members
Deposit and Current Account Interest
Sundry Income - Commission
Grants and Donations Receivable
Written off Debts Recovered
CUCA Fees
Transferred from Growth Fund
Surplus for the year before taxation
Corporation Tax
Surplus for the year before distribution
Transfer from/(to) General Reserve-Statutory
Unappropriated Surplus
Dividend Paid 2012
Transfer from/(to) Voluntary Reserve
£
4,072
1,669,992
14,557
,232
232,763
13,647
367,703
97,572
2,400,538
1 (b)
1 (b)
1 (c)
Less Expenses
Occupancy Costs
Stationery and Post
Administration Salaries and NIC
Audit and Accountancy
Bank Charges and Interest
Data Processing Charges and Software
General Expenses
Loans and Savings Insurance
Provision for Bad Debts
Depreciation
Telephone
Insurance - Fidelity Bond
Debt Recovery/Legal and Professional
Training, marketing, promotion and development
Directors' Expenses and Honoraria
ABCUL Dues
FSA Fees
Banking Services
Junior Savers Interest Payable
ISA Dividend Payable
Mortgage Interest Payable
2012
£
133,288
62,457
933,865
11,400
15,866
33,224
33,691
1,385
302,784
140,094
22,436
4,211
47,847
51,313
36,597
20,622
8,814
351,874
14,523
46,507
13,442
1 (e)
4,119
1,526,221
9,163
5,723
183,183
10,151
311,491
—
2,050,051
96,224
47,209
739,830
10,200
12,111
19,552
23,640
46,016
305,105
110,012
19,852
3,269
34,860
16,253
32,846
16,212
4,324
295,661
12,479
4,624
14,282
2,286,240
114,298
(3,106)
111,192
(22,238)
88,954
(97,008)
8,054
All amounts relate to continuing operations.
Camden Plus Credit Union Limited transferred its engagements to London Mutual Credit Union Limited on 1st June 2013.
The retained surplus for the year was the only recognised gain or loss in the year.
8
£
1,864,561
185,490
(1,784)
183,706
(36,741)
146,965
—
(146,965)
—
Balance Sheet as at 30th September 2013
Note
2013
£
Fixed Assets
Loans Due from Members
Less Provision for Bad Debts
5
2012
£
£
2,444,603
10,267,932
(1,051,151)
2,068,934
8,903,994
(815,279)
9,216,781
Current Assets
Prepayments and Debtors
Current & Deposit Account
Cash in Hand
Current Liabilities - due within one year
Provision for ISA Interest
Grants
Provision for Juvenile Savers Interest
Sundry Creditors
Corporation Tax
PAYE and NIC
Mortgage
Net Current Assets
Mortgage - amounts falling due over one year
Represented by:52
b
9
£
8,088,715
51,841
5,701,838
166,715
5,920,394
14,373
3,835,659
127,259
3,977,291
36,254
388,439
14,532
1,572,885
2,911
2,919
—
2,017,940
4,624
413,742
12,479
1,609,044
1,833
2,919
35,000
2,079,641
3,902,454
—
15,563,838
1,897,650
(627,690)
11,427,609
LMCU Newsletter 2014 final:Layout 1 03/04/2014 23:20 Page 11
Notes to the Financial Statements for the
year ended 30th September 2013
1. Accounting Policies
a) Accounting Policies
The financial statements have been prepared under the historical cost convention.
b) Interest
Bank interest is accounted for when receivable. Loan interest is accounted for, when received. Mortgage interest, ISA interest and
Junior Savers interest are accounted for when payable.
c)
Grants
Grants and donations are accounted for when receivable.
d) CUCA Fees
Transaction fees from the CUCA (Credit Union Current Account) are accounted for when received as they are credited directly into
London Mutual Credit Union Ltd's bank account by the Co-operative Bank Plc.
e) Corporation Tax
The provision of UK Corporation Tax is based on bank deposit account interest receivable for the period at the relevant rates.
f)
Dividends
Dividends will be accounted for in the year in which the members agree them at the AGM.
g) Comparative Figures
The comparative figures are for the year ended 30th September 2012.
h) Fixed Assets
1) Depreciation has been provided on fixed assets at rates considered sufficient to write them off over their useful lives:
2)
3)
Computer equipment
17.5% per year on cost
Fixtures and Fittings
10% per year on cost
Building & Refurbishment
2% per year on the revalued amounts
Banking Project & Pay Day Loan Project
10% per year on cost (see (2) and (3) below)
Leasehold Property
10% per year on cost
ABCUL Banking Services project
This was developed through ABCUL. London Mutual Credit Union Ltd was one of nine credit unions who each contributed the
same amount towards setting up a bank current account for people who previously could not get a current account. As new credit
unions join the Project, they will each make a contribution : part of which will be paid to London Mutual Credit Union Ltd.
Grants of £85,614 have been received towards this cost.
As it is expected that these costs will be recouped within ten years, they and the related grants are being written off over ten
years.
Grants for capital expenditure
Other grants for fixtures and fittings and the Pay Day Loan Project are being written off over the same period as the related
expenditure ie 10 years.
2. Statement of Total Recognised Gains and Losses
The retained surplus for the year was the only recognised gain or loss in the year.
3. Historical Cost Profit and Loss
All assets are stated in the financial statements at historical cost.
4.
Reservesl
Growth
Fund
£
1,530,989
—
(97,572)
—
1,433,417
Balance at 1st October 2012
From Revenue Account for the year
Growth Fund debts provision
Transfer Camden Plus Credit Union
Balance at 30th September 2013
General Reserve
Voluntary
Statutory
£
£
619,136
654,286
(8,054)
22,238
—
—
12,872
3,604
623,954
680,128
Camden Plus Union Limited transferred its engagements to London Mutual Credit Union Ltd on 1st June 2013.
10
Total
£
2,804,411
14,184
(97,572)
16,476
2,737,499
LMCU Newsletter 2014 final:Layout 1 03/04/2014 23:20 Page 12
Notes to the Financial Statements for the
year ended 30th September 2013
5.
Fixed Assets
Cost b/forward 1.10.12
Transfer – Camden Plus CU
Additions (Contribution)
Balance c/forward 30.9.13
Depreciation b/forward 1.10.12
Transfer – Camden Plus CU
Depreciation for the year
Balance c/forward 30.9.13
Net Book Value 2013
Net Book Value 2012
6.
Leasehold
Property
—
91,537
22,112
113,649
—
49,891
10,621
60,512
53,137
—
Computer &
Equipment
260,673
—
68,437
329,110
210,586
—
29,128
239,714
89,396
50,087
Fixtures &
Fittings
331,817
—
48,956
380,773
132,563
—
36,641
169,204
211,569
199,254
Freehold
Premises
1,780,932
—
336,721
2,117,653
94,26
—
42,353
136,615
1,981,038
1,686,670
Banking &
Pay Day Loan
Project
215,617
—
(2,109)
213,508
82,694
—
21,351
104,045
109,463
132,923
Total
2,589,039
91,537
474,117
3,154,693
520,105
49,891
140,094
710,090
2,444,603
2,068,934
Growth Fund
2013
£
—
—
—
—
—
Balance b/f 1.10.11
Received - grants
transfer to Reserves (note 4)
Less bad debts written off
transfer to General Revenue (as agreed by DWP)
2012
£
—
—
—
—
—
With the ending of the Growth Fund contract on 30th April 2012, the Fund balance has been transferred to Reserves but still shown
separately as recommended by the DWP.
7. Related Party Transactions
Loans are issued to directors on the same terms as those on offer to other members.
8.
Capital Commitments
2013
£
Capital expenditure contracted for, unpaid at the end of the year
and not provided for in the financial statements.
Capital Expenditure authorised by the Board, but not yet contracted for
9.
—
—
2012
£
246,250
—
Creditors and Accrued Charges
CUCA bank balance
Other creditors and accruals
2013
£
1,513,556
59,329
1,572,885
2012
£
1,445,224
163,820
1,609,044
2013
£
2012
£
62,200
38,700
10. Operating lease commitments for land and buildings
The annual total commitments are as follows:leases expiring after 5 years
11
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Stop press
Interest rate increase from
1st April 2014
Credit Union legislation will change
from 1st April 2014, allowing credit
unions to increase their interest rate
from 2% per month to 3% per month.
In APR terms, it will be from
26.8%APR to 42.6% APR.
We would like to inform you that
LMCU will be applying these new
rates to some of our loan products
when a member applies for a new
loan. All existing loans are not
affected by this rate increase.
The loan products affected by a rate
increase as from 1st April 2014 are:
Payday loans – increase from
26.8% APR to 42.6%
GF Loans and Prospect Loans –
increase from 26.8%APR to
35.2%APR.
These changes are necessary in order
for the credit union to cover its costs,
including bad debts. The Government
has carefully considered this increase
and has decided it is necessary for the
long term viability of credit unions in
the UK.
Credit unions are now competing with
some high cost lenders, who are
charging interests from 350%APR to
5000%APR.
Credit union loans are still cheaper as
compared to the high cost lenders and
we hope that you will understand
this. As always, interest is charged on
a daily basis and not loaded up-front,
there are no hidden costs, or penalties
for clearing a loan early.
London Mutual
Credit Union Limited
General enquiries:
Telephone: 020 7787 0770
Fax: 020 7277 9206
Email: info@creditunion.co.uk
Website: www.creditunion.co.uk
Branches and opening hours:
4 Heaton Road
Peckham,
London SE15 4TH
79 Denmark Hill
Camberwell
London SE5 8RS
10 Acre Lane
Brixton
Lambeth
London SW2 5SG
347 Royal College Street
Camden Town
London NW1 9QS
Opening hours are: Monday to Friday 9.30am to 4.30pm
18 Pilgrimage Street
Bermondsey
London SE1 4LL
Opening hours are: Monday to
Wednesday - 9.30am to 4.30pm
London Mutual Credit Union is authorised
by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority
and the Prudential Regulation Authority
(FRN 213248)