Leeds Rhinos Foundation joined Leeds City Council’s Executive Member for Communities, Cllr Debra Coupar and Leeds Rhinos player Liam Sutcliffe to launch the initiatives at the new Your Loan Shop at the community hub.
People in Leeds who are experiencing financial difficulty are being offered a more affordable way out of poverty thanks to a range of new initiatives introduced by the Leeds City Credit Union in partnership with Leeds City Council.
In one of the biggest moves since the Financial Conduct Authority (FCA) introduced its cap on interest rates for payday lenders earlier this year, a partnership between Leeds City Council, Leeds City Credit Union and key high street retailers will see a major attempt to compete with high cost lenders but offering more affordable borrowing options to purchase essential products.
Three new initiatives have been developed to help people who may have previously turned to pay day lenders to obtain credit in a more affordable way. The initiatives are to be launched at an event at the Compton Centre Community Hub in Leeds on Friday.
Leeds City Credit Union with the active encouragement and support of Leeds City Council has been working to develop these initiatives throughout the year. The result is the delivery of three services which will directly compete with every aspect of the high cost lending market.
The initiatives which have been developed include an extension of the successful "Your Loan Shop" – a credit union facility which was established a year ago on the high street in Harehills. It was designed to challenge the presence of other high street cash lender outlets in the area. This week’s launch will see a franchise of Your Loan Shop opening at a council-run community hub. If successful this model could be rolled out across the city in similar locations.
The credit union has also arranged a scheme with a number of high street retailers utilising credit union loan or savings to enable members to purchase goods at competitive prices and pay for them in small weekly instalments. In some cases this could mean that members could purchase goods for around 50% less* than if they shopped with a high-cost rent-to-buy retailers (*this is the overall cost, including credit).
The credit union will also soon be making available a web-based payday loan product offering significantly reduced interest rates compared to the normal payday sector. This will be available to members in the near future via the credit union’s website: www.leedscitycreditunion.co.uk
Councillor Debra Coupar, executive member for communities said: "This is a triple whammy for the high cost lending sector. We have worked in partnership with the credit union, advice partners and social landlords and many other partners in the city for many years to do what we can to assist hard-pressed families who don't have access to mainstream affordable financial services.
“We see these initiatives as a way of putting money back in to the household budgets of Leeds families who are struggling as a result of low wages, zero hours contracts and reductions in welfare benefits. Previously many families felt they had no option but to turn to high cost lenders. Now they have a genuine alternative.
“We are particularly delighted that three big national retailers have joined in this initiative. This is a classic example of how the public, private and community sectors can work together in partnership to deliver a better service for citizens of Leeds.”
Representatives from Leeds Rhinos and the Leeds Rhinos Foundation will be attending the launch event to show their support for the credit union and council’s work to help Leeds residents get out of poverty.
Gary Hetherington, Chief Executive of Leeds Rhinos, said: "Many of the rugby fans in Leeds and supporters of other sporting teams are facing hard times and struggling with their household budgets. At Leeds Rhinos Foundation we are proud of our work in the community.
“A sporting club is not just about performance on the pitch. It's also about how we can use our influence to support the many families who are the supporters of our teams."
Chris Smyth, Chief Executive of Leeds City Credit Union said: “We have been working with the council for many years, to develop a suite of products that will compete with the whole high cost lending sector and offer families a genuine more affordable alternative. The launch today provides options to Leeds residents which means that they no longer have to rely on high cost credit. It’s a good news day for Leeds.”