Joe Cullinane

Scottish Labour Councillor for Kilwinning

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Joe welcomes ‘Non-Standard Lending’ Group recommendations


Joe has welcomed the publication of the Council’s ‘Non-Standard Lending’ report. 

The ‘Non-Standard Lending’ Working Group was established in the aftermath of a motion by Joe on payday loans. The motion aimed to tackle the problem of payday loan debt and support the local Credit Union, 1stAlliance. The Working Group was later extended to investigate the wider problem of ‘non-standard lending’ such as Provident and BrightHouse.

Joe, who was a member of the Officer/Member Working Group said, 

“This is an important piece of work which shows that where we agree an issue needs to be addressed we can work across party political lines to make a real difference.” 

“With our research estimating that 10,000 people in North Ayrshire borrow a total of £10million from payday lenders, home credit companies, rent to buy outlets and pawnbrokers each year, paying around £5million in interest in the process, my aim from this Working Group was to get concrete proposals that would assist local people with debt, access to credit and improve financial literacy and I feel we have been able to achieve that.” 

“The recommendations, I believe, are both radical and bold. They tick all the right boxes – they will allow 1st Alliance to grow its membership, present not-for-profit alternatives to the worst forms of non-standard lending, will promote greater financial literacy for our young people and the wage advance scheme for Council workers would solve the problem so many workers across Scotland face – too much month left at the end of the money.” 

“Having campaigned against predatory Payday Loans since being elected I very much welcome the recommendations and will be pressing the Council administration to implement them in full.” 

Ann Robertson MBE, Director of 1st Alliance (Ayrshire) Credit Union, added, 

"We welcome the Non-Standard Lending’ report that North Ayrshire Council commissioned. The recommendations would assist us to accelerate our growth and reach. More importantly the recommendations offer a more affordable credit cost for those with limited access to main stream lenders."


Recommendations of the Non-Standard Lending Report 

1) Credit Unions


·         First Alliance is supported to grow its membership and loan book across all customer demographics through payroll deductions; the Council currently supports First Alliance and Community Planning Partnership and other partners to be encouraged to do the same.


·         Council to consider investing up to £50k in deferred shares with First Alliance to increase their ability to lend and retain a capital ratio that meets legislative requirements facilitating an expansion of their membership and loan book.


·         Develop an initiative to encourage the use of the Credit Union Current Account (CUCA) amongst 16 to 18 year olds to contribute towards good financial management and open the door to future credit provision.


·         Promote and incentivise young people to open a CUCA to deposit their wages, benefit or student grant cheque and utilise the account as their principal form of banking; and as an incentive deposit £12 for each account operational after a year.


2) Not for profit loan fund and rent-to-buy social enterprise schemes


·         Investigate the potential for a social enterprise in conjunction with other Councils and a CDFI offering affordable credit and linked savings products to complement First Alliance. This service should also offer both bank accounts and savings accounts, and could, potentially embed money advice.


·         Investigate "The Store" model to meet the needs of low income consumers requiring household goods on a rent-to-buy basis.


3) Debt and money advice services


·         Re-examine the relationship between debt and money advice services to ensure they meet the needs of customers and provide best value to North Ayrshire citizens;


·         Re-assess the resource requirements to extend or refocus the financial capability support (including Money Matters) to the most vulnerable citizens as part of their financial care plan;


·         Discuss with community planning partners the best way to:


- Help people identify issues at an early stage;

- Develop Early intervention and prevention approach; and

- Promote services available.


·         The Council to reaffirm its own debt collection practices, corporate debt policy and ensure its procedures do not exacerbate people’s financial difficulties.


4) Community Planning Partnerships


·         Community partners to be invited to consider supporting some or all of the recommendations outlined in the report.


5) Advanced payment of earnings


·         The report recommends investigating how North Ayrshire Council could make advanced payment of earnings to its employees. In investigating this it will be important that consideration is given to; the fact that North Ayrshire Council already pays employees in advance; whether making loans to its employees is part of the Council's core business; how this would be perceived by the wider North Ayrshire community and finally the potential financial risk to the Council.



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