Supplementary memorandum submitted by
the Association of British Credit Unions (ABCUL)
1.1 Following the publication of the HM
Treasury Consultation Paper A UK Unclaimed Asset Scheme: a consultation,
the Association of British Credit Unions Ltd would like to add
a small piece of supplementary written evidence to our previous
submission to the Treasury Committee's enquiry. This shows our
support for the exemption of credit unions from the definition
of organisations participating in the scheme.
2.1 As the principal trade association for
credit unions in England, Scotland and Wales, representing around
70% of credit unions and representing 85% of the share capital
in the movement, ABCUL welcomes the proposal, contained in paragraph
4.9 of the consultation document, for a specific exemption for
credit unions from participation in the scheme , which means that
money held in dormant credit union accounts will not be included
in any future scheme to ensure such funds are reinvested in society.
2.2 Credit unions have clear procedures
for dealing with inactive accounts; members are contacted at an
early stage of inactivity in their accounts (after 12 months)
which means that it is more likely that members will be reunited
with their money and/or encouraged to continue using the accounts.
2.3 If an account is declared dormant, the
credit union writes to member at his/her last known address containing
information on reactivating or closing the account. If six weeks
elapses without the member making contact with the credit union,
the credit union has the discretion to transfer the money in the
dormant account to a suspense account. The money remains in the
suspense account indefinitely and can be reclaimed by the member
at any time.
2.4 In the meantime, money in the suspense
account can be used to boost the funds of the credit union; any
money retained in credit unions' suspense accounts can be on-lent
to other credit union members, thereby providing a valuable source
of affordable credit for other members of the community. In this
way, credit union funds are already put to good use so it is not
necessary for money from their dormant accounts to be included
in a UK Unclaimed Asset Scheme.
2.5 We believe that credit unions' ability
to access funds including loans from a social investment bank
funded from unclaimed assets from banks and building societies
will contribute effectively to the growth and sustainability of
credit unions and their ability to impact upon financial exclusion.
We consider that taking unclaimed assets from credit unions for
a social investment bank which they may benefit from would be
inappropriate and may result in a situation where money is being
given with one hand and taken away with another.
ABCUL agrees with the proposal in the A UK Unclaimed
Asset Scheme: a consultation to exempt credit unions from the
scheme. We would like this to be included as supplementary evidence
along with our main submission sent on 21/02/07.