COUNCIL bosses have invested £50,000 in a credit union ahead of a predicted rise in demand for its services in the wake of changes to the benefits system.
Darlington Credit Union (DCU) has thanked Darlington Borough Council for the contribution, which will be in the form of a £15,000 deposit and £35,000 as a deferred share in the credit union.
Council leader Bill Dixon said the authority’s intervention will enable DCU to increase its capacity to loan money.
He said: “With the welfare changes taking effect this month, this means people in financial difficulty do not have to rely on payday lenders or illegal loan sharks.
“The council is not the only organisation in Darlington to support the credit union and I would call on others to do so as well.
“The credit union is a very practical and safe way to help those in need.
“It is a win-win situation for everybody – investors can be assured that their money is safe and that they are contributing to the community and vulnerable people can access help when they need it without having to use payday lenders and the like.”
The funds have been allocated from the council’s local area performance bond, following discussions with Darlington Partnership members.
Jo Price, from DCU, which is based in Darlington town centre, said: “We are very grateful for the support of the council, which will help us to continue to provide more people with affordable loans.”
Coun Dixon said the impact of welfare reforms, which started coming into effect on April 1, had already been felt at the town hall, with an unprecedented number of calls to the council’s housing department hotline from people affected by changes to housing benefits, the so-called ‘bedroom tax’.
He added: “The council is committed to no one being evicted as a result of this tax, but nevertheless it places a massive strain on families.
“We see the credit union as a key element of how people can get through these difficult times.”
Last month, the credit union announced tentative plans to form a community bank, writing an open letter to residents in an effort canvass opinions.
For more information about the services offered by DCU, visit darlingtoncreditunion.co.uk
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