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NEW YORK – The National Federation of Community Development Credit Unions has been helping to establish a fledging community development credit union community in Britain, an effort that may finally see the establishment of the United Kingdom’s first Community Development Credit Union, according to Cliff Rosenthal, CDCU executive director. A five-member delegation of British credit union officials which are involved in the effort recently toured the NFCDCU headquarters in N.Y., and got a close look at several Federation member institutions, including the $9 million Lower East Side Peoples FCU, along with the $9 million Bronx based Bethex FCU and $8 million Union Settlement FCU. The group also traveled to the Federation’s training program in New Hampshire as well as to tour the $18 million Vermont Development Credit Union, based in Burlington. “While CDCUs do not exist in name in Britain, many of the credit unions we’ve met would be readily identifiable as kindred institutions by the Federation’s members,” Rosenthal said. “Many of the issues that motivate them are similar, if not identical, to the ones we face. There are predatory lending firms in abundance, including names familiar to us in the U.S.,” he added. One element of predatory lending with which Americans are probably not familiar, Rosenthal said, are the so-called “doorstep” lenders who make weekly collections at people’s homes. The Federation is working with the Birmingham Credit Union Development Agency (BCUDA) – in an effort to organize credit unions in and around the city of Birmingham – but also in other areas in the Kingdom to offer a British version of predatory intervention that the Federation has developed. The relationship between the Federation and British credit unions dates back to the late 1980s, Rosenthal said, when the Federation began to host visitors from England and Scotland. Despite having strong cooperative roots in England, Rosenthal explained, the industry suffered under a comparatively weak credit union history. “Credit unions were hampered by an extremely restrictive law,” Rosenthal said, and he credited the widespread arrival of immigrants from Britain’s former Caribbean colonies, where there is a strong credit union tradition, for carrying the idea more broadly across the U.K. The growing popularity of credit unions in the U.K. resulted in many springing up in the 1990s, he said. These, while small by U.S. standards, nonetheless caught the attention of Prime Minister Tony Blair, who saw them as one of the possible vehicles the country could use to address lack of credit and the growing percentage of the population that lacked a relationship with a financial institution. The credit union movement in Britain is debating right now about which way to go in the future, said Jim Dearlove, organizer of the BDCUA. “There are around 700 credit unions in Britain,” he said. “The majority are small community-based organizations with less than 250 members. Overall, less than 1% of the British population are credit union members. Some say that large, payroll deduction-led credit unions are the way to go. Others worry that in that case those with low and medium incomes might be left out.” Dearlove explained that everyone on the trip had been struck by how comprehensive the training at the CDCU Institute had been and that the British credit union movement needed something similar, along with the partnerships that will add value to the educational experience, he added. “Both visiting the credit unions and the Institute have enabled us to move closer to our goal of establishing CDCUs in Britain,” Dearlove said. Everyone came away more deeply committed to establishing a number of pilot CDCUs in Britain in order to learn lessons and provide models for others, he said. [email protected]

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