Drumchapel Community Credit Union

Drumchapel Community Credit Union is a not-for-profit credit union serving the Drumchapel area of Glasgow. It takes deposits from members and lends from the pool those savings create, and it appears on the Bank of England list of credit unions incorporated in the UK¹. Its website is drumchapelcreditunion.co.uk².

It is a member-owned organisation rather than a bank. Members save into shares, and those pooled savings are used to fund loans to other members. The credit union states that members' savings are 100% protected by the Financial Services Compensation Scheme up to £85,000³. It offers savings accounts and loans, and its terms of membership set out who can join and how the accounts work⁴.

This page covers what the credit union offers, who is eligible, how to join and run an account, how borrowing works, and what happens if something goes wrong.

What Drumchapel Community Credit Union is

A credit union is a group of people connected by a common bond, based on the area they live in, the occupation they work in, or the employer they work for, who save together and lend to each other⁷. Credit unions are not-for-profit community lenders providing affordable loans and savings⁸. They are mutual organisations, which means they are run for their members rather than for outside shareholders⁹.

Drumchapel Community Credit Union follows that model. Members hold shares, which is how saving works at a credit union, and the credit union lends from the pool those savings create. The credit union's own terms describe a member as entitled to one vote in its democratic proceedings, regardless of how much they have saved⁴. That is the practical difference between a credit union and a bank: each member has one vote whatever the size of their savings.

The credit union is not a bank and does not offer the full range of services a bank does. Credit unions generally cannot offer overdrafts, mortgages, electronic banking services and payment methods, or business loans in the same way as a bank¹⁰. What they can offer is savings and loans, and at some larger credit unions current accounts and other services too¹¹. Services vary between credit unions, so what is available at one is not a guide to what is available at another¹².

If you are new to the idea, the guide to credit unions explains how the model works across the UK, and the savings and loans guides cover those products more broadly.

Savings with Drumchapel Community Credit Union

Saving at a credit union means buying shares in it, and that makes you a member rather than just a customer. The credit union's savings page sets out several accounts, each with a different purpose⁶.

• Share 1: the main savings account. Withdrawals can be requested at any time⁶.
• Share 2: a savings account for members putting money aside for a specific reason, such as car tax or insurance, a football season ticket or birthdays. A withdrawal can be made at any time on this account⁶.
• Share 3: shares held as security against a loan. These are available to withdraw only when the loan is repaid⁶.
• Share 4, the Christmas Savings Account: savings are secured until 1 October each year, can then be withdrawn up until 31 December, and any remaining balance is secured until the following October⁶.

That last account is the one to read carefully before opening. A Christmas savings account is designed to stop members dipping into the money before the festive season, and the lock is a condition of the account rather than a penalty. If you might need the money in, say, August, Share 1 or Share 2 is the account that allows it.

Across the wider credit union sector, saving is flexible in amount and timing: members can save large or small amounts weekly, monthly or whenever they have spare cash¹³. Some credit unions pay an annual dividend on savings, which depends on how the year has gone and is recommended by the board and approved by members at the annual general meeting⁴. A dividend is not interest and is not guaranteed. At Drumchapel Community Credit Union, dividend can only be paid to active members' accounts, and it is not paid to any member with a current bad debt within the credit union⁴.

Loans from a credit union: how borrowing works

You must be a member of a credit union to get a loan from it, and some credit unions ask you to build up savings first¹⁴. At Drumchapel Community Credit Union, loans are based on the ability to repay and on how your account with the credit union operates, and decisions are made by a committee rather than a computer scorecard¹⁵. That is a meaningful difference from a bank: a person looks at your circumstances, not only a credit score.

The credit union's loans page describes several types of borrowing¹⁵:

• Unsecured loans. Proof of income and proof of address may be required, in the form of a bank statement showing income and outgoings¹⁵.
• Secured loans. Where a loan is totally secured, shares up to the value of the loan are attached. No proof of income or outgoings is required, and the arrangement can be passed on application¹⁵.
• First loans. These may require an interview, and a recent bank statement may be needed when applying for any loan that is not secured¹⁵.
• Flexi Loan. Open to members who have been saving and borrowing for over six months. It is a loan with a limit set that the member can dip in and out of, with no need to complete an application form¹⁵.

The credit union also offers free loan protection insurance on its loans¹⁵. Where a credit union sells insurance of this kind, the cover is provided by an insurer rather than underwritten by the credit union itself, and the terms are set out in the policy documents you receive.

Borrowing from a credit union generally works differently from a high-cost lender. Credit unions commonly allow members to borrow two or three times as much as they have saved, at a low interest rate¹⁶, and repayments can have some flexibility¹⁷. Some credit unions lend as soon as you become a member, while others lend only after you have saved for a set period, and affordability is checked against the money you have left after paying bills¹¹. Members' savings are what fund loans to other credit-worthy members⁷.

If you are considering consolidating existing debts with a credit union loan, the mechanics are the same as any consolidation: you work out how much you need to borrow to pay off all your debt, apply for a loan for that amount, and if approved use the money to pay back each creditor, leaving one monthly repayment¹⁸. Some credit unions pay creditors directly on the member's behalf¹⁹. Consolidation is not right for everyone, and the debt guide sets out the alternatives, including free advice services.

Who can join Drumchapel Community Credit Union

Membership of a credit union is based on a common bond⁷. Anyone can become a member, but they must share that bond with other members, whether that is the area they live in, the occupation they work in or the employer they work for⁷. Most local areas have a credit union²⁰.

Drumchapel Community Credit Union's terms of membership set out who is eligible⁴:

• Relatives in the same household as a qualifying member are able to join the credit union⁴.
• Students are able to join⁴.
• Temporary workers are able to join. The credit union defines a temporary worker as an employee with less than a 12-month contract⁴.
• Members who leave the common bond, for example by moving away, are able to remain in membership as a non-qualifying members⁴.

That last point matters if you move house. Leaving the area does not force you out of the credit union, and your savings and any loan relationship can continue.

Across the sector, eligibility has been widening. Building societies have noted that eligibility is extending to include students, local workers and relatives of existing members, reflecting the way people live and work now²¹. Anyone in the house of a person with a common bond with a credit union can usually join²⁰. If you are not sure whether you qualify at Drumchapel, the terms of membership are the document to check, and the credit union's own staff can confirm it.

How to join and manage your account

Applications for loans can be made online at any time¹⁵. The credit union's website, drumchapelcreditunion.co.uk, is the address listed on the register², and it is where the current terms, savings information and loan information sit.

A few practical points apply to joining a credit union generally:

1. Check the common bond. Confirm you live, work, study or volunteer in the area the credit union covers, or that you qualify through a relative in the same household⁴.
2. Have identification ready. Credit unions commonly ask for photographic identification and proof of address if electronic verification does not confirm your details²².
3. Open a savings account first. Saving is what makes you a member, and some credit unions ask you to build up savings before they will lend¹⁴.
4. Set up how you will pay in. Credit unions accept payments in different ways, including at an office, by direct debit, by cash and cheque, or by debit card²³.
5. Keep your account active. At Drumchapel Community Credit Union, dividend can only be paid to active members' accounts⁴.

Credit unions deliver their services in different ways. Some offer online and phone banking, some work through a payroll partnership with your employer, and some run a local branch or service point you can walk into²⁴. Larger credit unions may offer current accounts, and where they do, the free features usually include paying in or taking out cash at the credit union, having wages, benefits and pensions paid in, online, mobile or telephone banking, and budgeting advice and support²⁵. If a current account is what you need, the current accounts guide explains how they compare with a bank account.

Authorised and regulated as a UK credit union

Drumchapel Community Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority⁴. Its firm reference number is 213919⁴. On the register the firm appears with a status of Authorised, an effective date of 02/07/2002, and permission to accept deposits². It also appears on the Bank of England list of credit unions incorporated in the UK¹.

Credit unions across the UK are regulated by the Financial Conduct Authority⁸. The split between the two regulators is the same one that applies to banks and building societies: the Prudential Regulation Authority handles authorisation and prudential standards, and the Financial Conduct Authority handles conduct. For a member, the practical effect is that the credit union is subject to the same kind of supervision as other deposit takers, and that complaints can ultimately go to the Financial Ombudsman Service.

Checking a firm is on the register is free and takes a minute. The register is the authoritative list, and it is the same check that applies to any financial firm: visit the regulator's website to check whether a company is authorised²⁶. If you are contacted by something claiming to be the credit union and asking for money or details, check the register entry and the website address before responding. Investment and impersonation scams often use the name of a real firm, and the scams and fraud guide explains the warning signs.

FSCS protection for savings held with the credit union

Savings held with Drumchapel Community Credit Union are protected by the Financial Services Compensation Scheme. The credit union states that members' savings are 100% protected by the scheme up to £85,000⁶, and that the money deposited into a credit union account, up to £85,000, is protected under the Financial Services Compensation Scheme³.

The scheme applies to credit unions generally: loans and savings are protected by the Financial Services Compensation Scheme⁸. Other credit unions describe the same protection in their own words, with some stating that eligible savings are protected subject to the scheme's rules and limits²⁷, and others confirming that all deposits are covered¹⁹.

If you hold savings with more than one brand that shares a single licence, those balances count together towards the same limit. The credit union states the £85,000 figure for its own accounts³.

Two things are worth separating. The compensation scheme protects your savings if the credit union fails. It does not protect you against your own decisions, such as taking out a loan you cannot repay, and it does not cover the cost of borrowing. Loans are a debt you owe, not an asset the scheme insures.

If you hold savings above the limit, the usual approach is to spread them across institutions that do not share a banking permission, so that each institution's limit applies separately. The savings guide covers how the limits work in more detail, and the consumer protection guide explains the wider safety net, including the ombudsman.

Complaints and where to get help

If you are dissatisfied with the credit union's services, members can request a copy of its internal procedure on complaints handling⁴. That is the first step: raise the complaint with the credit union and give it the chance to put things right.

If the complaint is not resolved to your satisfaction, the credit union is covered by the Financial Ombudsman Service⁴. The ombudsman is free to use and independent of the firm. It publishes quarterly complaints data covering the firms it handles cases about, which gives a sense of the volume and type of complaints across financial services²⁸.

Where a complaint concerns a claims management company rather than the credit union itself, the route is different: you can complain to the Financial Conduct Authority if you are unhappy with the conduct of a claims company²⁹. For complaints about credit repair companies, the route is your local trading standards department, run by your local council³⁰.

Free and impartial help is available if money problems are part of what you are dealing with. StepChange and National Debtline both offer free debt advice, and the debt guide sets out the options, including debt management plans and breathing space. If you are struggling with priority debts such as rent or council tax, those come before credit union repayments in any realistic budget, and free advisers can help you work out the order.