Welsh Journals

INTRODUCTION Credit unions are to be found in many countries throughout the world and are particularly popular in the United States, Canada, Australia and the Republic of Ireland. The first credit union to be registered in the United Kingdom was formed in the London suburb of Wimbledon in 1964, and in 1971 the Crowther Committee advocated that steps be taken to raise public awareness of credit unions. Although there has since been substantial growth in the number of such unions in the UK the credit union remains an institution which is uncommon and relatively unknown in Wales. As such, a primary purpose of this article is to introduce the concept of the credit union to many readers of Contemporary Wales. The limited Welsh experience is contrasted with that of certain other parts of the UK and in the Republic of Ireland, and barriers to growth of credit unions are considered together with proposals for reform. The article concludes by considering the potential for the development of credit unions in Wales. WHAT ARE CREDIT UNIONS? As credit unions are almost unknown in Wales it is important to examine what they are and how they work. According to lain Crow, Geraint Howells and Kathy Pick (1993): 'Credit unions are financial co-operatives organised around the Rochdale co-operative principles of open membership, democratic control, limited interest on capital, equal distribution of surplus, education and feder- alisation.' While the principal purpose of credit unions would appear to be to lend money to members at rates of interest which are lower than would normally be charged by other lenders it is important to note the other aspects of the definition.2 In particular there is a legal ceiling on the interest rate that 5. CREDIT UNIONS IN WALES: A RARE BREED1 Andrew Campbell