Capital Credit Union calls for action on personal debt
Credit union appeal to Scottish government to appoint a financial welfare czar as part of a package to help recovery from the Covid pandemic.
The Edinburgh-based organization says a three-pronged approach between credit unions, government and employers is needed to guide people through difficult financial times ahead.
Marlene Shiels, Managing Director of Capital, said: “It is absolutely vital that the Scottish and UK governments show leadership and have a workable plan to help tackle the personal debt problem. The leave plan masks the true extent of the problem and, in the end, I fear we are facing a tidal wave of debt problems. Financial resilience is at an all-time low with around 14.5 million people having less than £ 100 in savings.
“Appointing someone to specifically oversee the personal debt issue would be an important first step and a message that the Scottish government is ready and willing to tackle the spiraling personal financial problem. The government must get ahead of the curve rather than wait to assess the damage and it must act now. “
The union said the appointment of a tsar is part of a five-point charter that Capital is promoting to help the recovery and includes a call for the UK government to reform the Credit Union Act to allow credit unions to build a more sustainable business model, which will allow them to serve more people who need access to affordable credit. He’s also looking to change bankruptcy rules to prevent companies that mislead consumers from taking out debt solutions that aren’t right for them, causing much more harm to consumers.
Ms Shiels said credit unions and other financial institutions must also play their role in helping their members and clients improve their financial well-being and resilience by promoting a culture of savings among employers, developing education programs and indicating relevant help and support.
She added, “We also need to see regulators and watchdogs crack down on bad behavior, which often leads consumers to make bad decisions and can have costly and lasting effects on them. Expensive and inappropriate loans and bad advice on debt solutions must stop. “
Last month, Capital also launched its Covid Wellbeing Package which it promotes to employers and professional organizations. This includes a series of educational and support materials as well as products specially developed to address current issues.