Guy Lambert Explains Credit Unions
Supporting people with poor credit history and local community
BrentfordTW8 asked Cllr Guy Lambert to talk about his passion for Thamesbank and he did:
Thamesbank Credit Union is the local, not-for-profit, mutually owned savings and loan outfit which helps local people, especially those with poor credit histories, to manage their finances. It was founded in Brentford and we now work throughout Hounslow and in neighbouring Boroughs.
Our mission is to help people avoid payday and doorstep lenders who advertise heavily but often charge 20 or 30 times as much as we do for their services! Of course there are ‘real’ loan sharks that are worse still and some of the companies offering rentals of household appliances are just as bad: you pay up to three times as much for the same product as you would with a Thamesbank loan and you still don’t own it at the end! There’s an even simpler way of getting some electrical appliances via www.fairforyou.co.uk – a company specialising in taking on high street rental shops with an ethical alternative - just launched and with Brentford man Tom Levitt as a key driver.
Our interest rates on loans vary from 1% to 3% a month (APR of up to 42.8% maximum). There are no fees for loans and no penalties or difficulties if you want to pay off early.
Apart from the smallest loans, we usually ask people to save for 3 months before asking for a loan but we’ll waive that requirement if we have an arrangement with your employer for repayments to be deducted directly from members’ pay packets. We have also recently introduced an instant loan that you pay back by signing your child benefit over to us.
Our aim is to be completely transparent and fair. Our depositors and borrowers own 100% of the shares of the Credit Union and democratically run it, (though getting members to engage is a constant struggle!). We don’t pay interest on deposits, but whenever possible we pay a dividend to savers from our profits.
A good example of how the Credit Union can help local people is Hazel, who lives on the Haverfield Estate in Brentford. A change of circumstances left her with real financial troubles a few years ago. Already a mother of two, she fell pregnant with a third just as she signed up for a new car and just before she split up with her partner. This plunged her into severe debt and she had no alternative but to turn to doorstep and payday lenders just to keep the wolf from the door.
Luckily she discovered Thamesbank and, starting with small loans, managed to clear all her debts over a period of three years, except what’s left on her Thamesbank loan – but she’s also got plenty of savings in her Thamesbank share account which she’s building up gradually towards a deposit for when she’s ready to buy a home. She will be completely debt free in a few months.
Says Hazel “I was really struggling before Thamesbank came along and I couldn’t see how I was going to get out of debt – ever! The interest rates on payday and doorstep loans are so high it seemed impossible to keep up, and the Banks took one look at my finances and fell about laughing.
Thamesbank have been very strict with me, just advancing small amounts to start with and, as I was living from hand to mouth in the early days, my payments were occasionally a day or two late. They really don’t like it when you’re late but gradually I’ve been able to build trust and qualify for bigger loans so now my only debt is to the credit union and I’m paying that off rapidly.
Many of the credit union directors, none of whom are paid, live in Brentford or Isleworth and they’re doing their best to help make life a little easier for local people. I’ve had my fallings-out with them when they’ve shilly-shallied about approving my loans but I know really, they have to be careful because they are risking people’s savings, although in fact savings are guaranteed by the government.
The bottom line is that before I and my family started using the credit union we were constantly in difficulties, whereas now I can really see my way to a good, prosperous future“.
Thamesbank directors are Brentford residents Guy Lambert and Andrew Lewin, and Arthur Male from Isleworth. They are assisted by volunteers Jayaa Sathiyanarayan from Hounslow, Julia Bindman from Richmond, Eleanor Handslip from Staines, Grant McManus from Putney and Hor Chan from Strawberry Hill. All the directors and volunteers are unpaid. We are supported by former local headteacher Hilary Ellwood, who is really the life and soul of Thamesbank. We outsource our day to day admin to a workers’ cooperative called Credit Union Solutions who provide us, and 5 other credit unions, with top service at reasonable cost.
We don’t really advertise, relying on word of mouth (and BrentfordTW8.com!) to spread the message, but we’ve grown to about 800 members and about £750,000 in the bank or out on loan.
We are lucky enough to be regulated not only by the Financial Conduct Authority but also the Prudential Regulation Authority, and the good news is that means up to £75,000 of each member’s deposits are guaranteed by the Financial Services Compensation Scheme.
If you think you could benefit from saving or borrowing with us, visit Thames Bank
March 9, 2016
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