Slumbering Giant or White Elephant - Do Credit Unions Have a Role in the United Kingdom Credit Market

At any time, the significance of a device which facilitates saving and borrowing and encourages the prudent management of credit and debt is clear. If the situation is one of an active credit market where certain categories of borrowers either cannot purchase credit in the market or can only do so on terms which will, inevitably, cause problems, and if these defects cannot be cured or regulated by existing legislation, then the importance of such an alternative only increases. The credit union is such a device. It has an established and proven record of success in many countries but, outside of Northern Ireland, credit unions are in their infancy in the United Kingdom. In this article, we seek to examine, against the background of the increasing problem of debt in the United Kingdom, the efficacy of present legal controls, and to present as our central thesis that mere legal reform is not sufficient. What is needed is an alternative source or sources of credit. We contend that the credit union can provide such an alternative. Its origins and utility, and, particularly, its legal framework in Northern Ireland and the rest of the United Kingdom, are examined with a view to assessing its role as a whole or partial answer to the management of credit and the control of debt in Britain.