To all our valued members,
You may have already heard about the decision to ask our members for a £15 membership fee, and I would like to tell you more about the reasons behind this decision. This is something we have never done before, and we have always taken pride in not charging members for anything if we can cover the cost internally.
The credit union has been affected by a number of issues over the past three years, which have all followed on from each other and have proved to be incredibly challenging.
Firstly, we joined the UK government scheme to update credit unions to a new operating platform known as the Credit Union Expansion Project (CUEP). On face value this appeared to be a very safe choice to make, but sadly the government became very concerned about the organisation they chose to deliver the project and decided to halt all funding. The result of this was that Voyager Alliance Credit Union had to pay all costs to exit the project and despite much lobbying we were unable to get any help from the government.
The fall out of the CUEP left the credit union in a position of having to find a new IT platform with the functionality of the project platform. This was vital as members generally found that internet banking and instant access to funds was important to them. After much research and investigation, the Board chose Tata Consultancy Services (TCS) as the best option. The full cost of migrating to a new platform has been paid by the credit union with no help from the UK government, which in the Board's view was responsible for the problem as it did not manage the CUEP responsibly.
In addition to this, the merger with Retail Credit Union has caused us problems with our reserves as they were financed in a different way to Voyager Alliance Credit Union. This has had an impact on the credit union reserves which would not have caused too much concern in normal times but the last three years have unfortunately been far from normal.
This last year has seen the Covid crisis drastically reduce our members' needs to borrow, in particular affecting the demand for holiday loans, and with all the uncertainty about how long it will last many people are less prepared to borrow. The uncertainty around Brexit has also had the same effect. Most people are just not prepared to look at holidays abroad until the crisis is over.
Our dilemma is that we need to balance the books as soon as we can, therefore the Board reluctantly agreed to request a £15 membership fee. This will mean there will be no compulsory staff redundancies and will help to bring us in line with Bank of England regulations.
A motion was put to the AGM in December 2020 and was carried. It is our intention to apply this charge during February 2021.
For the first time in nearly 30 years, we are turning to our members to ask for them to help rebuild our reserves. We have helped thousands of members over the years and will help many thousands more in the future. In real terms we have saved members millions of pounds with our interest rates on loans being so much better than other alternatives, and we have given our savers so much more in interest than they could ever have obtained from a high street bank. We also know that we have helped many members escape from dangerous payday lenders and their extortionate, crippling interest rates.
I hope that this has helped explain the reasoning behind this decision and that you and all of our esteemed members will support us in rebuilding our reserves so we can continue to offer savings and loans to benefit all.
CEO Voyager Alliance Credit Union