LONDON—Members of the U.K’s armed forces are being given a credit union as an alternative to using payday lenders. The U.K.’s Treasury is putting up £500,000—all from fines paid as part of the investigation over LIBOR violations—to get the credit union started.
It will allow service personnel and veterans in debt to loan sharks and pay day lenders to pay off the money through payroll or pension deductions via a credit union. The Co-op Party had campaigned for the credit union for members of the military.
“I am absolutely delighted our long-running campaign has persuaded the government to introduce a military credit union to help soldiers, sailors and veterans from falling into the clutches of payday lenders,” Co-op Party chair Gareth Thomas was quoted by The Mirror as saying.
The Mirror has reported in 2014 that soldiers’ charities are having to spend millions of pounds each year to help cope with members of the military who have been victimized by payday lenders.
The Royal British Legion reported that the number of its members using its debt advice service rose by 450% between 2007-2011. And the Mirror reported that the ABF Soldiers’ Charity had over the past 12 months it has given more than £5million to assist serving personnel and veterans, including those with financial problems.