There was no Scottish banking collapse

[Bill Fernie]

I just read an article with this thought.
http://www.newsnetscotland.com/economy/2164-there-was-no-scottish-banking-collapse.html

I wonder if others feel it is fair that politicians in the south seem to be united that Scotland could not have baled out the banks here if we were running them ourselves.

The article indicates how mergers etc have moved control and that lack of regulation was to blame.

I still remember the days when Scots were held up as amongst the best savers in the UK and likely to borrow less. Those days disappeared with easier credit and the advance of ever bigger mortgages.

Would the old Trustee Savings Bank have gone under like the rest if it had not been merged with Lloyds Bank.

Japan was a very strong economy when its citizens had a huge propensity to save.

Everything needs to begin somewhere and perhaps we all need to begin to build our savings once again. It would probably help to have a local bank based in the Highlands but that is pretty well impossible nowadays.

Banks are there to provide a place to build up capital reserves for use at a future date and in the meantime be put to use to make an economy grow. Less speculative (or as many now see it gambling activities) might not be as spicy or lucrative for the top investment bankers but might in the long run provide indivuals with some reserves and stabilise our banks.

So where to begin. I think at the bottom. We have a huge number of people in debt in our country and many struggling to pay bills. Highland Council has joined into a credit union with Western Isles and I would say that if more people were to join this then there would be access for many to banking and they could build up small savings. For those that do not know about it, and it got almost no publicity a few months ago, I would say it is worth everyone looking at joining this organisation and saving a small amount each month. Funds are accessible like a bank and interest rates are low. That might not be a benefit now in times of low interest rates but the point is in the credit union they are always low due to the way they work. Loans are usually for small amounts but it stops people having to go to loan sharks or other organisations charging huge interest rates.

You can find more information about the credit union at www.hi-scot.com/ (http://www.hi-scot.com/)

Whether you join the credit union or not it would be interesting to hear views on whether Scotland could have avoided this banking situation if we had had our own regulations here with financial watchdogs having more control here. Once our banks did very well for a small country and led the way. Helping our economy and providing a great service. They can again but it will take everyone to save somewhere in all our interests. Once capital is built up investment can be made without so much borrowing. Everyone would benefit if all of us saved. Jobs will certainly follow with investment. Do you think a movement like a credit union could move our economy forward?

[pat]

Agree with you Bill on this - at the financial institutions we are paying for the very large offices usually in prestigious places, extremely well paid employees, fat cat bosses and all the huge bonuses paid to them for doing their job!
Am a member of Western Isles Credit Union and have been since just after they started - cannot praise them enough, very friendly staff who are extremely discreet but know me and how I work my finances with them.
I stick in a few pounds at odd occasions, then when I realise I have quite a bit saved I have a treat to myself without any feelings of guilt - you know what I mean ladies I am sure!
You can open an account with as little as about a £1 I think, you are part of the Credit Union and can be part of the decision making.
I have a plastic pig from Western Isles Credit Union and stick some of my change in occasionally then take it along and get it added to my account - saving without noticing!
Great for children as with the clear plastic pig they can see the money grow, take it along to the office and feel it is their personal bank - makes them very conscious of where their money is and when the interest is paid it is a great little bonus too.
You can save or you can also get a loan at a very reasonable interest rate, much lower than is normally available I understand - sorry not tested that one yet so cannot say but pal in Ireland has and rate was extremely low besides the bank.
At least with the Credit Union if you want you can have a say in where your money is invested - and it is usually fairly ethical money investment too.
Pity the Credit Union do not deal with business accounts or my accounts would be transferred immediately
If you want sensible local money handling go along to your local Credit Union office.

[divanp75]

So is this like the new bank for scotland. Found what you said very interesting. Thank you

[gleeber]

Sounds interesting. I havn't got time now to read the links but I will.

[secrets in symmetry]

You can read the article if you want, but be prepared to get the usual anti-English spin that Hazel Lewry spends her life weaving. She could have been trained by Peter Mandelson.

[secrets in symmetry]

I forgot to say that I looked into taking out a loan with a local credit union last year. Their loan interest rates were higher than I could get with national banks, and their savings rates were as low as everyone else's. I didn't go any further with them.

[weezer 316]

I forgot to say that I looked into taking out a loan with a local credit union last year. Their loan interest rates were higher than I could get with national banks, and their savings rates were as low as everyone else's. I didn't go any further with them.

Some nationalist are almost religious in thier zeal.

It cost about £500bn to bail the banks out. RBS and HBOS accounted for the vast majority of the share purchases and liquidity that was pumped in, on top of the insurance that was forked out for. This is about 8x scotlands GDP, which is around £86bn.....

In short we would be iceland times 10 independent

[Shabbychic]

Some nationalist are almost religious in thier zeal.

It cost about £500bn to bail the banks out. RBS and HBOS accounted for the vast majority of the share purchases and liquidity that was pumped in, on top of the insurance that was forked out for. This is about 8x scotlands GDP, which is around £86bn.....

In short we would be iceland times 10 independent

Actually the RBS and HBOS had substantial activities in England as well as other places, therefore the bailing out of these banks would have been shared accordingly, and not fallen only on Scotland.

[ducati]

RBS and Bank of Scotland were and are global businesses, where they are headquartered is not that relevant. They came under the UK regularatory bodies. Even if Scotland were independent it would not regulate these banks.

Credit unions are a great thing. More and more people are marginalised by the mainstream financial institutions. IMO they should get involved in Mortgages. Plenty of people who could afford to pay a mortgage could never buy a house because the lenders..wouldn’t, for whatever reason.

[weezer 316]

Actually the RBS and HBOS had substantial activities in England as well as other places, therefore the bailing out of these banks would have been shared accordingly, and not fallen only on Scotland.

No, your wrong. RBS has substantial holdings in may countries, yet they didnt bail it out. And I didnt see the UK govt coughing up money for Citibak did you despite its huge presence in the UK market.

[oldmarine]

Bill Fernie gives good advise in his posting. I suggest everyone read it close and carefully.

[pat]

http://www.hebrides-news.com/danny-alexander-treasury-minister-20511.html

just to let you know what is on local hebrides news website.



Treasury minister Danny Alexander will be on Lewis next week to open the new offices of the Hi-Scot Credit Union.



Mr Alexander was due to come last month when the community bank relocated from Cromwell Street in Stornoway to bigger premises on James Street.



The move marks an important development for the organisation’s expansion into the Highlands and Islands.



It originally set up as the Western Isles Credit Union to create a community bank to offer fair loans and savings to islanders.



It served as such an impressive resource it attracted demand from across the Highlands and Orkney to spread its wings into their areas.

[bcsman]

what do you think of the collapse of CHaP Bill?,and when are we going to be contacted by the coucil about the replacement heating thats going to cost more millions?

I just read an article with this thought.
http://www.newsnetscotland.com/economy/2164-there-was-no-scottish-banking-collapse.html

I wonder if others feel it is fair that politicians in the south seem to be united that Scotland could not have baled out the banks here if we were running them ourselves.

The article indicates how mergers etc have moved control and that lack of regulation was to blame.

I still remember the days when Scots were held up as amongst the best savers in the UK and likely to borrow less. Those days disappeared with easier credit and the advance of ever bigger mortgages.

Would the old Trustee Savings Bank have gone under like the rest if it had not been merged with Lloyds Bank.

Japan was a very strong economy when its citizens had a huge propensity to save.

Everything needs to begin somewhere and perhaps we all need to begin to build our savings once again. It would probably help to have a local bank based in the Highlands but that is pretty well impossible nowadays.

Banks are there to provide a place to build up capital reserves for use at a future date and in the meantime be put to use to make an economy grow. Less speculative (or as many now see it gambling activities) might not be as spicy or lucrative for the top investment bankers but might in the long run provide indivuals with some reserves and stabilise our banks.

So where to begin. I think at the bottom. We have a huge number of people in debt in our country and many struggling to pay bills. Highland Council has joined into a credit union with Western Isles and I would say that if more people were to join this then there would be access for many to banking and they could build up small savings. For those that do not know about it, and it got almost no publicity a few months ago, I would say it is worth everyone looking at joining this organisation and saving a small amount each month. Funds are accessible like a bank and interest rates are low. That might not be a benefit now in times of low interest rates but the point is in the credit union they are always low due to the way they work. Loans are usually for small amounts but it stops people having to go to loan sharks or other organisations charging huge interest rates.

You can find more information about the credit union at www.hi-scot.com/ (http://www.hi-scot.com/)

Whether you join the credit union or not it would be interesting to hear views on whether Scotland could have avoided this banking situation if we had had our own regulations here with financial watchdogs having more control here. Once our banks did very well for a small country and led the way. Helping our economy and providing a great service. They can again but it will take everyone to save somewhere in all our interests. Once capital is built up investment can be made without so much borrowing. Everyone would benefit if all of us saved. Jobs will certainly follow with investment. Do you think a movement like a credit union could move our economy forward?

[secrets in symmetry]

A problem with credit unions is that their advantages to the customer can be purely mythical. People believe credit unions are cheaper because they think they ought to be.

For loans over a few thousand, it is cheaper going to my bank. For small loans, it's a lot cheaper using my credit card. A quick comparison with two local credit unions reveals Hi-Scot's loans to be significantly more expensive.

The cheapest loans are usually obtained by extending your mortgage, with the obvious caveats.

[Bill Fernie]

A problem with credit unions is that their advantages to the customer can be purely mythical. People believe credit unions are cheaper because they think they ought to be.

For loans over a few thousand, it is cheaper going to my bank. For small loans, it's a lot cheaper using my credit card. A quick comparison with two local credit unions reveals Hi-Scot's loans to be significantly more expensive.

The cheapest loans are usually obtained by extending your mortgage, with the obvious caveats.

You may well be correct at the present time. However when interest rates were high credit unions had low rates by comparison. If interest rates rise once again credit unions will once again be very competitive.

Another main point for credit unions is that they offer the chance to give banking to people who cannot get an account with the main banks. This has the advantage of keeping small loans linked to small savings and develops a saving habit and helps keep people out of the hand high rate chargers whether they are legal or criminal.

For folk who can afford it it is a chance to help the whole community by saving and thus increasing the amount of capital available for small loans. There are many reasons for using a credit union and you need to consider all of the advantages to society and community as well as the cost or benefits to the individual. Communities with too much debt are less likely to be able to start new businesses. Communities with savings have a lot less problems and new businesses no matter how small are able to be started.

The costs of starting up a credit union are significant and after a good deal of research we decided to go in with the exising credit union already running from the Western Isles and now spreading across the Highlands.

Some information is at http://www.highland.gov.uk/NR/rdonlyres/1D89407F-30FA-467B-BA3C-9F9DDB8B3584/0/Item16res4509.pdf
Release - http://www.highland.gov.uk/yourcouncil/news/newsreleases/2010/December/2010-12-03-01.htm
Highland goes into the Credit Union http://www.highland.gov.uk/NR/rdonlyres/B1A6CBDC-211A-4D58-9A3F-7C79BF2E1A28/0/Item26RES11410.pdf

[secrets in symmetry]

Of course I'm correct! I checked all those interest rates yesterday.

I first came across credit unions several years ago, when the Bank of England rate was a lot higher. At that time the loan rates at the one I looked into made it more expensive than banks and credit cards, and their interest rates on savings were also low. Again, this is counter to the standard folklore concerning credit unions.

As far as I can see, their main uses are to provide a small loan service for those without bank accounts or credit cards, and to encourage them to save. The interest rate for (partially secured) loans between £100 and £1500 is 23.14%, which isn't exactly low. It's 26.82% on unsecured loans. However, this is a market that banks aren't interested in, and credit unions can help fill the gap.

It appears that, unlike some other credit unions, Hi-Scot don't pay interest on savings. Instead, "depending on reserves, shares are eligible for an annual dividend." Without knowing what the typical dividend is, it's hard to decide whether saving with them makes any sense, but the lack of information is not encouraging.

[oldmarine]

You may well be correct at the present time. However when interest rates were high credit unions had low rates by comparison. If interest rates rise once again credit unions will once again be very competitive.

Another main point for credit unions is that they offer the chance to give banking to people who cannot get an account with the main banks. This has the advantage of keeping small loans linked to small savings and develops a saving habit and helps keep people out of the hand high rate chargers whether they are legal or criminal.

For folk who can afford it it is a chance to help the whole community by saving and thus increasing the amount of capital available for small loans. There are many reasons for using a credit union and you need to consider all of the advantages to society and community as well as the cost or benefits to the individual. Communities with too much debt are less likely to be able to start new businesses. Communities with savings have a lot less problems and new businesses no matter how small are able to be started.

The costs of starting up a credit union are significant and after a good deal of research we decided to go in with the exising credit union already running from the Western Isles and now spreading across the Highlands.

Some information is at http://www.highland.gov.uk/NR/rdonlyres/1D89407F-30FA-467B-BA3C-9F9DDB8B3584/0/Item16res4509.pdf
Release - http://www.highland.gov.uk/yourcouncil/news/newsreleases/2010/December/2010-12-03-01.htm
Highland goes into the Credit Union http://www.highland.gov.uk/NR/rdonlyres/B1A6CBDC-211A-4D58-9A3F-7C79BF2E1A28/0/Item26RES11410.pdf

I agree with Bill. I have accounts in both my bank and my credit union. I try to take advantage of both for the best offers they can provide.

[RecQuery]

I suppose that as with ethical and fair trade food, that credit unions are essentially ethical financial/banking institutions and as such they can't give the extremes of unethical banking institutions.

I really should look into moving my account into a credit union or opening a second account.

[HI-Scot Credit Union]

Thanks for the positive comments on this site - much appreciated.

I thought I would take the opportunity to clarify a number of points.

A loan with a Credit Union is not always more expensive than with one of the mainstream lenders - for example a £5,000 freedom loan from HI-scot Credit Union carries a representative rate of 12.68%, looking at the RBS website 2 minutes ago a loan of similar value carries a representative rate of 17.6%.

There are of course some eye catching numbers out there - Tesco Bank offer a representative rate of 8.7% for the same amount but how many applicants will actually qualify for that rate?.

For some people borrowing from the Credit Union will be more expensive, for others it will be cheaper. One thing that is certain is that the flexibility offered by the credit Unions will not be matched by any other lender.

At this time Credit Unions are not allowed to pay interest on savings - some pay a dividend, some do not. Hi-Scot Credit Union has paid a dividend of 2% every year since it was founded (in 2006). Not bad for an instant access savings account. It looks as though legislation will change in the next 12 months which will give credit Unions the flexibility to pay interest - keep an eye on our website for news.

If anyone has any interest in joining the Credit Union you can call us on 01851 701865 or take a look at our website www.hi-scot.com.


David Mackay
General Manager
HI-Scot Credit Union

[NickInTheNorth]

I'd just like to say that I have found the Hi-Scot credit union an absolute pleasure to deal with. I know my small amount of savings are safe and secure. If I need a loan I know that there is the possibility of getting one, none of the banks would lend me anything!


My Christmas savings account will not be lost in any corporate failure, and at the start of november I'll be getting my christmas shopping money back. Very sensibly the £10 per week that is going in there is not available for withdrawal until then.

The staff are always helpful even when I do something stupid.

Online access to your accounts to check balances at any time.

And you can open an account by visiting your local Highland Council service point.

I'd rather "bank" with the credit union that any bank. Unfortunately they don't do direct debits or standing orders so still need a bank account for that.

Overall they provide a great service, and I could not care less what interest rate they are charging. They are not keeping any institutional shareholders fat, nor paying bonuses to greedy self serving gamblers.

[pat]

Just recently an very unexpected bill for over £3,500 arrived - money tied up long term with serious penalties for early withdrawal.

Luckily I had my Credit Union account - got them to write a cheque for the bill.

Now I have to start refilling the account (as that is my personal emergency fund) - luckily I did have very easy access to this money when required and the staff cannot be more friendly and professional.

[secrets in symmetry]

A loan with a Credit Union is not always more expensive than with one of the mainstream lenders - for example a £5,000 freedom loan from HI-scot Credit Union carries a representative rate of 12.68%, looking at the RBS website 2 minutes ago a loan of similar value carries a representative rate of 17.6%.
That loan would be 9.4% with one credit union I'm familiar with, and 9.8% with the other two. The first isn't open to everyone, but the other two are.


At this time Credit Unions are not allowed to pay interest on savings - some pay a dividend, some do not. Hi-Scot Credit Union has paid a dividend of 2% every year since it was founded (in 2006). Not bad for an instant access savings account. It looks as though legislation will change in the next 12 months which will give credit Unions the flexibility to pay interest - keep an eye on our website for news.Thanks for the clarification.

One of the CUs I mentioned previously does indeed refer to its dividend rate - so mea culpa - but the other openly speaks of paying interest. I suppose the latter is technically a dividend.

[HI-Scot Credit Union]

For those of you interested in joining a Credit Union, the main UK trade association offer a useful lookup facility to help you identify Credit Unions that you may be eligible to join. You can find this by selecting the 'find your credit union' option at www.abcul.org (http://www.abcul.org) (it's about half way down on the right hand side of the page).

The research carried out by Highland Council (links to the documentation are in post #15) stated that no Credit Unions existed which covered the whole of the Highlands. HI-Scot Credit Union extended it's common bond (the geographical area in which it can legally operate) at the end of 2010 and is the only Credit Union which offers it's services to everyone who lives or works in the Highlands & Islands of Scotland

I have just carried out a search using a range of KW postcodes and I can't find any other Credit Union that is available to those who live or work in Caithness. Of course, it's possible that I am simply not aware of them and they don't use the ABCUL search facility.

David Mackay
General Manager
HI-Scot Credit Union

[secrets in symmetry]

The credit unions I referred to are not in the Highlands. I was going to state that, but it was past my bedtime.

Perhaps I should have been clearer, but I'm not impressed with you being pleased with your monopoly status, which allows you to charge higher interest on loans than I can get here. :cool:

[oldmarine]

This speaks well for the Highlands communicty of Scotland.

[HI-Scot Credit Union]

Hi-Scot credit Union now has a presence on Facebook - please take a look and click on like :)