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Credit Union Expansion Project

James Mead edited this page May 17, 2018 · 5 revisions

The broad objectives of the Expansion Project are:

for credit unions to provide financial services and loans to 1 million more customers on lower incomes by 2019 (500K by the end of March 2015), and for participating credit unions to achieve financial sustainability by the end of the project

Rough timeline of events

Cornerstone Mutual Services is a Credit Union Service Organisation (CUSO) that was established by ABCUL in February 2012. It is a trading subsidiary of ABCUL that has been asked to take on the development of the more commercial aspects of it’s work supporting credit union operations. This includes existing back office services such as The Credit Union Current Account and the ABCUL prepaid card. The ABCUL Board have also tasked Cornerstone Mutual Services with developing a range of new collaborative services for credit unions. The overall corporate strategy is to pursue growth by providing credit unions with new services which will help drive sustainable growth for them.

In particular, the DWP will make a further investment of up to £38 million over the next three years in credit unions. This investment, which is in addition to the £13 million we invested in 2011/12, will be conditional upon the credit union industry meeting a number of agreed milestones for collaboration, modernisation and expansion. Our aim will be to ensure the industry’s financial sustainability by the end of the project.

The Department for Work and Pensions, HM Treasury, and the Department for Business Innovation and Skills will continue to work closely on all aspects of the Credit Union Expansion Project, including the formal consultation on the interest rate cap and any subsequent legislative changes.

This is now hosted at nationalarchives.org.uk but still contains useful information about the expansion project.

News about ABCUL's Shared Business Model project that appears to predate, but be very closely aligned with, the CUEP.

This presentation appears to have been given to prepare potential suppliers for the Invitation to Tender. It contains snippets of what appear in the CUEP draft specification.

This is a draft of the document that went out as part of the Invitation to Tender process.

Minimum requirements

  • Automated loan decision making
  • shared credit control, marketing, HR and accountancy
  • current accounts, savings accounts, budgeting accounts and debit cards

At the point of entry to CUEP a consortium or partnership will include a minimum of 15 credit unions, with no less than 120,000 adult members.

Potential suppliers must also demonstrate how the project will expand to include a minimum of a further 25 credit unions, with no less than 200,000 additional adult members at the point of entry to the project, by Oct 2014.

Suppliers and their partners will contribute a minimum of 25% of the total costs of the new system’s requirement

These are in here independently as they're not linked from main site.

This contains a link to a redacted copy of the winning CUEP bid submitted by ABCUL.

This bid is being led by the Association of British Credit Unions (ABCUL). ABCUL is the primary trade association for credit unions. The bidding consortium consists of ABCUL itself, Cornerstone Mutual Services, its service company subsidiary and 82 individual credit unions.

From page 89:

Outside of the bidding consortium there will be a requirement for further sub-contracts to be put in place between Cornerstone and the actual suppliers of marketing services and IT / systems.

I'm not quite sure how the 31 credit unions mentioned here relates to the 82 that are mentioned in ABCUL's CUEP bid.

third-sector.co.uk to provide support for the Credit Union Expansion Programme.

This suggests that an automated lending tool is already speeding up decisions in Project credit unions.

An automated lending tool is already speeding up loan decisions in Project credit unions and CUEP is developing a range of further products and services which will improve the efficiency of credit unions.

At the end of 2013 Prospect joined representatives of the UK’s Credit Unions to present our involvement in an exciting plan to boost the not-for-profit financial organisations sector.

Following the discussions with the DWP and Cornerstone's board meeting held on 29 August, it has been agreed "to continue working with the DWP to develop plans for stabilising the three live credit unions – Voyager Alliance, East London and RetailCURe", according to an Abcul letter to its members seen by Banking Technology.

"We will, however, be halting the migration of any further credit unions onto the platform until we have achieved this stabilisation," it goes on to say.

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