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<p>LONDON, U.K. – It’s almost impossible to imagine. Could any U.S. credit union manager picture Chase Manhattan having a lunch and inviting 50 U.S. credit unions to attend the launch of a new pilot program for the introduction of an accounting system? Or anything else for that matter that would benefit credit unions. That’s exactly what happened in the United Kingdom when Barclays Bank held a luncheon to introduce the World Council of Credit Unions’ (WOCCU) PEARLS Accounting System to British, Welsh and Scottish credit unions. A pilot program for 10 credit unions will begin soon and has the backing of the British government. Until now a variety of accounting systems have been used, including the US CAMEL system. PEARLS, which is claimed to be stricter than CAMEL and helps developing credit unions, is an acronym which strands for Protection, Effective financial structure, Asset Quality, Rates of Returns and Costs, Liquidity and Signs of growth. It is used in over 20 countries, according to Arthur Arnold, WOCCU’s CEO. Unlike CUs in the U.S., U.K. credit unions are usually small. Until recently, laws have limited their growth to under 5,000 members. That will change in July when a new regulatory body, the Financial Services Authority (FSA) takes over. However, the government sees credit unions as a way to provide financial services for the “unbanked”. One of the ways to strengthen the credit union movement is through safe and strict accounting practices. That is the main reason that the Association of British Credit Unions, Ltd. (ABCUL) and Barclays Bank sponsoring the occasion. The bank understands the need for strict accounting practices since it is subject to over 150 financial services regulators around the world. Their sponsorship won the British-based bank kudos from Economic Secretary to the Treasury, Ruth Kelly. She stated, “This Government is very keen to see the credit union movement flourish in Britain. I am delighted that Barclays has agreed to support such a worthwhile project at a time when the Government is working to modernize and strengthen the regulation of credit unions in this country.” However regardless of government praise, British banks are willing to go only so far in helping local credit unions. ABCUL had been trying to develop a central services organization (CSO) for credit unions based on a key recommendations of the Treasury Task Force on Credit Unions. The objective was to provide a central finance facility and development and marketing support for credit unions with financial support from banks. The British Bankers’ Association, the Co-operative Bank and the Royal Bank of Scotland and ABCUL developed the CSO plans and published them August 2000. The CSO needed a 20 million investment over six years mainly from banks. It was not forthcoming for a number of reasons, including disunity within the British credit union movement itself. Banks have agreed to fund and support certain projects, according to ABCUL spokesperson Abbie Shelton. Barclays is one example of that bank-credit union cooperation. In comparison to the tensions between American credit unions and banks battle, the lack of funding is minor when sponsorship of programs such as the introduction of the PEARLS pilot program is seen. Barclays participation in the introduction of PEARLS is part of that attempt. The event drew a number of dignitaries including ABCUL CEO Shaun Spiers, Financial Services Authority Chairman Howard Davies, Martin Moseley, Consumer and Community Affairs Director at Barclays, and WOCCU’s CEO, Arthur Arnold. Representatives from 50 credit unions from throughout the United Kingdom also attended. -</p> <p>[email protected]</p>

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