The Co-op Credit Union
The Co-operative Credit UnionAnnual General Meeting, 25th January 20171 Angel Square, Manchester at 1.15pmAGENDAMeeting opens and welcome – Chris SmithApologies – Chris SmithMinutes of the last AGM held on 4 February 2016 – Chris SmithChair’s Review – Chris SmithOperations Manager’s Report – Andy DaveyTreasurer’s Report and consideration of annual accounts – Andy OldaleDeclaration of Dividend – Andy OldaleAuditor’s Report – Beevers & Struthers AccountantsAppointment of Auditors – Andy OldaleCredit Committee Report – Rebecca HamiltonSupervisory Committee Report – Charles SimElection of Directors – Claire DaltonElection to the Credit Committee – Claire DaltonElection to the Supervisory Committee – Claire DaltonGraham Southall Award – by himselfAny other business – Chris SmithMeeting closes – Chris SmithFriends of the Credit Union Lottery Committee Report - Chris SmithTHE CO-OPERATIVE CREDIT UNIONMinutes of the ANNUAL GENERAL MEETING held at 12.30pmOn Thursday 4 February 2016 in the Auditorium Annex1 Angel Square, ManchesterWELCOME AND APOLOGIESThe Chair, Chris Smith, welcomed all members and attendees to the meeting. He also thanked his fellow directors, employee, volunteers and members for their support throughout the year. The Chair advised that as there were vacancies on the Board, members could indicate if they wished to put themselves forward adding that any nomination would be considered by the Nominations Committee. MINUTES OF THE AGM – held 4 February 2015 were confirmed as a correct record.MATTERS ARISINGAll matters arising were covered on the agenda. CHAIR’S REVIEWThe Chair presented his review of 2016.Key itemsThe Chair gave special thanks to Tony Britten from whom he had taken over as Chair of the Co-operative Credit Union (CCU) during the course of the year. At the end of 2015, the CCU CEO, Linda Edwards had moved on from the CCU to continue her career as a Business Change Specialist. The Board thanked Linda for her hard work and contribution to the CCU’s success over the past two years. A period of restructure within the CCU office had followed with Andy Davey being appointed as Operations Manager, Sheena Jennison being appointed as Finance and Credit Control Manager and Janet Henry taking on the role of Office Manager. The Chair thanked the office team for all their hard work. Thanks also went to Nora Brennan and Eleanor Murdoch who had left the Board during the year, and also to Michael Shepherd who had stepped down from the Supervisory Committee. PerformanceCCU had seen a challenging year with impact from redundancies in parts of the Common Bond, notably the Co-operative Group, which had reduced CCU’s ability to provide loans at levels seen in previous years. Performance for the financial year had been lower than expected, attributed to the fall in loan volumes. This was partly due to the diligent approach to the loan application approval process which was in place due to issues with rising bad debts. The Board had taken remedial action to tackle the problem of bad debts by increased use of the automated lending decision system, improved employee training and increased tariffs for riskier lending. Collection procedures had also been reviewed, and as a result, levels of repayment were positive. The Board acknowledged however, that in order to operate a money lending service, there would be some level of bad debt and so it was key to lend wisely in order to mitigate the negative impact. Other headlinesThe Chair presented other key headlines for the financial year including:Launch of a Leadership Team comprising the Chair and Deputy Chairs, with all board members welcome to attend. Launch of a Nominations CommitteePostponement of entry into government backed credit union expansion project CUEP Introduction of additional member services with The Phone Co-op and Co-operative EnergyMembership was up 17% to 8,331 membersLoans were down 1% to ?2.5mShares had increased by 13% to ?4.1mTotal assets had increased by 12% to ?4.44mIncome had increased by 11% to ?526kSurplus had increased to ?58k as a result of receipt of the Lloyds grant, which otherwise would been a deficit of ?42k. A ?5 annual fee was to be introduced reflecting the cost of protecting the enlarged credit union from a cyber-society perspective and to ensure members could continue to access the professional service offered. OPERATION MANAGER’S UPDATEThe Chair introduced Andy Davey to his review of 2016 covering the following themes: CCU had become a Living Wage employerArranged for employees to be supported by a pension scheme and pensions adviceFuture initiatives included a revolving credit facility and a social account designed for members with poor credit ratings to help them improveThe Chair thanked Andy for his presentation. TREASURER’S REPORT AND CONSIDERATION OF ACCOUNTSThe Chair introduced Andy Oldale, the CCU’s Treasurer to present his Treasurer’s Report. The Treasurer presented his report and concluded that bad debt continued to be a challenge for the CCU. The CCU had made a surplus of ?57,750, which was an improvement on the previous year. The Treasurer re-affirmed that the CCU was sustainable with sufficient funds in reserves. The Treasurer reported that in line with governance best practice, the CCU’s would undertake an audit firm tender exercise during 2016.The Treasurer commended colleagues in the CCU and his fellow Board members for their time commitment to the CCU. AUDITOR’S REPORTChris Lowe representing Beever and Struthers, advised that the key items had been covered within the reports from the Chair and the Treasurer. He was pleased to report that there were no issues with the accounts presented. DECLARATION OF DIVIDENDFollowing both the Treasurer’s and Auditor’s reports, the Treasurer recommended that a dividend of 0.25% (previous year 1%) was paid*. *It was noted that the board of directors had approved an interim dividend of 0.25% at its board meeting of November 2015 in order that payment to members would be made prior to Christmas and this was the members’ ratification of that decision. CREDIT COMMITTEE REPORTThe Credit Committee report was received and noted. The Credit Committee Chair, Rebecca Hamilton thanked all members of the Credit Committee for their input throughout the year. 3102 loans for a value of ?2,718,481 had been issued to members during the financial yearThe team had been committed to tackling the issue of bad debt by working closely with the office team and by using the Automatic Lending Decision (ALD) system. The team also endeavoured to assist members who were genuinely in arrears and pursued those who wilfully did not pay arrears, in recognition of the fact that this was members’ money. SUPERVISORY COMMITTEE REPORTThe Supervisory Committee report was received and it was noted that the operations of the CCU were in order. FRIENDS OF THE CREDIT UNION LOTTERY COMMITTEE REPORTThe Friends of the Credit Union Lottery Committee Report was received and noted. The Chair advised members that this committee ran the lottery independently from the CCU and as FCA regulations did not allow its accounts to be included on the balance sheet but did allow the CCU to benefit from proceeds donated to it. APPOINTMENT OF AUDITORSThe Treasurer recommended that Beever and Struthers were retained as the CCU’s auditors for 2015/2016 and members approved this recommendation. It was noted, as per the Treasurer’s earlier report that an audit firm tender exercise would take place during the year. ELECTION OF DIRECTORSThe Secretary advised that there were seven vacancies on the Board of Directors and one nomination had been received. No voting was, therefore, necessary and Rebecca Hamilton was re-elected to serve a three year term of office. ELECTION TO THE CREDIT COMMITTEEThe Secretary advised that the Credit Committee was re-elected each year. Existing members of this committee had all advised that they were prepared to continue in their valuable roles and, therefore, Rebecca Hamilton, Nora Brennan, Peter Brookes, and Teresa Lord, John Rudd and Adrian Smithies were all re-elected until the next AGM. ELECTION TO THE LOTTERY COMMITTEEThere were currently no representatives on the committee. ELECTION TO THE SUPERVISORY COMMITTEEThere was one vacancy on the committee following the resignation of Michael Shepherd. A nomination from Charles Sim had been received and he was duly elected to the Supervisory Committee. Ken Jackson and Brian Redman had also agreed to continue in their valuable roles on the committee. GRAHAM SOUTHALL AWARDIt was noted that the award would be presented to Barbara Scarlett in recognition of her commitment to the CCU.CLOSE OF MEETINGThe Chair expressed thanks to the members, the Board and the office team for their support of the CCU and closed the meeting. Chair Persons Statement 2015/2016I pleased to be able to report that the credit union is in fine shape and the results for the year ending September 30th 2016 show that we have responded favourably from a tough previous year. However, we are seeing some of our members struggling even whilst in work. Recent member research revealed that combined incomes of our members are on a wide range of incomes. The largest section of combined household income is between ?40K- ?50K; however 23% have a household income of less than ?20K per annum.We believe that middle income families have become the new victims of Britain’s growing?social mobility crisis. Families earning a combined income of less than ?20,000 a year have now joined young people and those on low incomes in being unable to climb the social and economic ladder. We are seeing members trying to make ends meet as wages often lag behind cost of living increases. Families are running harder and harder and yet standing still. Politicians make pledges to make social mobility a key priority but ambition and rhetoric seems to serve to highlight the problem; not fix it. The credit union remains far more flexible and affordable than many other lenders in the market place but the credit union movement cannot be a financial lifeboat as social mobility becomes more and more difficult. Putting Members FirstOur aim is to provide members with a simple mechanism of savings, and combined loans, and clearly we are fulfilling this aim with an average of ?2.4M in lending per annum over the last 5 years and a massive 96% increase in savings during in the same period. Our credit union has become vital for many members in affording home repairs, emergencies such as a washing machine or car repair. Our credit union is a vital budgeting system for many families that are now using us in greater numbers; but more fundamentally we agree with much of the recent 2016 report from the Social Mobility Commission that states that current and next generation of young families will not be able to purchase their own homes. The social divisions we face in Britain today impact many more people and places than the very poorest in society or the few thousands youngsters who miss out on a top university. Whole sections of society and whole tracts of Britain feel left behind. ?As the EU referendum result showed, the public mood is sour and decision-makers have been far too slow to respond. The commission proposed a sweeping 10-year programme of reforms to tackle an unfair education system, a two-tier labour market, a regionally imbalanced economy and an unaffordable housing market. Its recommendations include building three million homes over the next decade, with a third commissioned by the public sector; expanding the sale of public sector land for new homes and targeted house-building on Green Belt land. The Government’s “Starter Home” scheme should focus on households with average incomes, and when sold these homes should go to other low-income households with the same discount.The commission said the 20th century expectation that each generation would be better off than the preceding one is no longer being met. It found that those born in the 1980s are the first post-war cohort not to start their working years with higher incomes than their immediate predecessors. Only one in eight children from a low income background is likely to become a high earner as an adult. Business highlights of the year 2015 to 2016:Membership numbers are more or less flat – line down by 0.4% on last year however we undertook an extensive dormant exercise during the year with the closure of 350 accounts. Although our loans are averaging at ?2.4M per annum, over the last 5 years, loans are down by 12.7% during this last trading year. This is partly down to having a financial year where we had two months where we received a double payroll month. I cannot remember this happening in any previous financial year and won’t happen again for many years.?Shares are up 12.3%, demonstrating a strong endorsement of the credit union by our members.?Assets up 12.7%?Income up 15%?Surplus is up 251% at ?95K (in 2015 it was ?27K but that included a ?100K grant received from Lloyds Bank). ?New IT system to be installedThe credit union aspires to offer a service to its members every bit as good as that provided by other financial service providers. Our members tell us we are great on the phone and face-to-face, but we have been held back in recent years by the limitations of the technology at the core of the credit union’s operations. During 2016, the board initiated a review of its strategic technology options, with a particular focus on being able to provide members with enhanced online and mobile facilities and better security for their data. We have identified a suitable new software package, provided by our existing, proven supplier, and are now in the process of agreeing the commercial terms. This investment is in our technology will be a substantial. The income we have achieved during this trading year is timely as this investment will certainly be probably the largest capital investment we have made in our history. Currently we do not offer a modern savings and loans service to our members and yet we expect them to accept old fashioned methods of communication and access. Subject to funding and contracts, we plan to install the new system during 2017 and expect that members will see improved services, such as a mobile phone app, almost immediately. This massive upgrade in out IT will enable much easier access to loans and shares for members using accepted hand held and tablet devices. Our office team will undertake extensive training on the new system and we will keep you informed of the changes as they come about.Directorship NewsDuring the year we had the retirement of our director Garry Hickton. We wish Garry a happy retirement and thank him for his contributions during his time on the board of directors. David Fawell was co-opted onto the board of directors and has made an immediate contribution to the boards heavy work load with his knowledge and skills from the world of payments, research and banking.Sadly, the death of Nora Brennan was a great shock to us all. Nora was one of our long term volunteers and directors. She will be sadly missed by the many volunteers and workers at our credit union. Nora became a great advocate of the credit union following her retirement, from a long career at The Co-op Bank, and she became a director and regular volunteer in the office taking on a wide range of duties. Much loved and sadly missed.ConclusionI cannot let the year pass without thanking some of the people that have contributed to the success of our year. Our future looks good as we enter our 19th year of operation and we aim to remain a valuable asset to our members and that requires us to remain relevant to their needs. Relevance is vital; if we are not a preferred choice by our members, for savings and loans, then we will merely be seen as ‘life boat’ in people’s eyes. Yes we want to serve those members that are struggling but we need to further establish the credit union as efficient, easy, cost effective and ethical place to save and borrow. Our new IT will go a long way to ensuring our relevance and enables our employees to have the means to offer an even higher level of member service. Thanks you for your custom. -15768490482ThanksNumerous situations arise every single day at the credit union that warrants our genuine?appreciation?and gratitude. But, most times, we allow a quick and standard "thanks" that's mumbled in passing to fit the bill. Of course, a "thank you" is always appreciated …….but, we've all become so used to hearing those two little words, they've all but lost their meaning in many cases. When someone does something that inspires you to offer an expression that seems even more heartfelt and sincere, we find ourselves struggling to demonstrate our thankfulness -- without relying on those oft-repeated words.However, here are some of the stand-out performers we wish to really thank during the year we are reporting on:Andy Davey – Operations ManagerJanet Henry – Office ManagerThe Office TeamRebecca Hamilton – Director - volunteerLinda Edwards – Former CEOClaire Dalton – Secretary - volunteerDavid Dickman – Vice Chair - volunteer Nick Money – Vice Chair – volunteer00ThanksNumerous situations arise every single day at the credit union that warrants our genuine?appreciation?and gratitude. But, most times, we allow a quick and standard "thanks" that's mumbled in passing to fit the bill. Of course, a "thank you" is always appreciated …….but, we've all become so used to hearing those two little words, they've all but lost their meaning in many cases. When someone does something that inspires you to offer an expression that seems even more heartfelt and sincere, we find ourselves struggling to demonstrate our thankfulness -- without relying on those oft-repeated words.However, here are some of the stand-out performers we wish to really thank during the year we are reporting on:Andy Davey – Operations ManagerJanet Henry – Office ManagerThe Office TeamRebecca Hamilton – Director - volunteerLinda Edwards – Former CEOClaire Dalton – Secretary - volunteerDavid Dickman – Vice Chair - volunteer Nick Money – Vice Chair – volunteerOperations Managers Report 2015-16Five Years of Growth We have seen significant changes in many areas over 5 years:-Member numbers increased by 66.8%Share balances increased by 96.6%Assets increased by 94%Income increased by 63.7%However loans to members during the same 5 year period have only increased by 0.09%. Our member survey in 2016 indicated that over 60% of our members are unlikely to borrow from anywhere in the next 12 months so clearly – we have a huge challenge. Making Borrowing EasierSince we established the amount we lend to a member has, in the main been determined by the amount a member has saved-4 x times share balance, ?250 = ?1000.While the model works, it can be restrictive. A new member or those members without significant savings looking for a ?5000 or ?10,000 loan would be charged a higher interest rate and often deter members from applying. In order to address this we are moving to a capacity to repay model. New members or those without significant savings can apply for a loan, for the amount they require, with interest rates from 14.8% APR, based on their ability to meet and maintain the required repayments. Savers will still be rewarded with a loyalty loan offering a 3% discount.Software Upgrade We continue to explore new software and aim to bring a solution during 2017. Technology has changed drastically over the last 5 years, everywhere you go whether you are on a bus, a train, in a doctor’s waiting room or in the local supermarket, you see someone using their phone. At a recent conference in Glasgow I had the pleasure of listening to Iona Bain who is a regular columnist in the Times, Sunday Times, Mirror and Telegraph and also owns the award winning- Young Money Blog. Iona talked about millennials and how they want to conduct their financial affairs online through their smartphone, iphone, tablet or laptop.It’s not just millennials either, after a recent visit to Police Credit Union in Birmingham; they were telling us how their new software and member enhancements have resulted in an increase for members registered online from 20% to almost 50% with over 11,000 members registered with all age ranges.In order for CCU to remain relevant and not continue with an ageing membership base – we need to change. Increased member capability through technology enhancementsMember’s able to action their own share withdrawals 24/7Digital loan agreements (paperless)Better communication channels for CCUNew ProductsWe are pleased to launch some new specific saving accounts designed for members who wish to save for a specific purpose.Christmas SaverUniversity FundBaby FundWedding Fund Home Deposit AccountWith the new loan structure and improved IT developments I am confident the Co-operative Credit Union will be in a position to grow and prosper for many years to come.The Office and the Team2015/16 has been a very pleasing year after starting the year with a little disruption having said goodbye to our Chief Executive Linda Edwards. We had a reshuffle in staffing with Janet stepping up to Office Manager and myself as Operations Manager with oversight of the business, liaising closely with our newly formed leadership team and board of directors. After a difficult and challenging previous year, we had to take a step back, ask ourselves some difficult questions and ensure we recognise who we are and what we are trying to achieve. My personal thanks to each and every member of the team, our fantastic volunteers, it has been a pleasure to work with you all during the year. For continuity, we recognise the necessity to multi skill our team, so we have spent time this year in sharing duties, coaching and mentoring which will continue in the coming year. All staff have signed up to the new ABCUL training academy and we look forward to assisting the team in their personal development. Congratulations to Jake and Matthew on completion of their International Compliance Association qualification in Compliance and Financial Crime.Andy DaveyOperations ManagerTHE CO-OPERATIVE CREDIT UNION CREDIT COMMITTEEREPORT FOR ANNUAL GENERAL MEETING25th January 2017The Credit Committee comprises of the following members:Rebecca Hamilton – Chair, Group Internal AuditJohn Rudd – IT Finance ManagerAdrian Smithies - Senior Manager, Transformation, Business BankingThe Chair of the Committee is also on the Board of Directors. The Committee meet bi-monthly to consider ongoing loans policy and visits the office regularly to consider loan applications that are above the limits of the office staff as well as out of policy and emergency loans.The Committee is also involved in monitoring bad debt and potential bad debt cases. Like every organisation that lends money, there is always the risk of bad debts. The Credit Union is different in that when a member gets into arrears of payment, we will offer as much assistance as we can to help our member e.g. re-negotiate the loan repayments, advice from external agencies etc.However, where a member quite wilfully does not pay arrears, we will pursue the matter vigorously and take action to recover the outstanding loan, including taking out County Court proceedings and charging orders on property. After all, this is our members’ money we are lending out.We are pleased to advise that during the last financial year:2889 loans for a value of ?2,345,363.85 have been issued to members. (This brings the total number of loans issued to 29195 for a value of ?26,713,117).The smallest loan issued was ?60.00 and the largest ?16,500.00.Average loans this year were ?812.00 and the average of all loans since we formed is ?915.00.The most popular loan requests remain for car purchase, home improvements, holidays, Christmas and credit card consolidation. CCU Supervisory Committee Report 2015 – 2016The Supervisory Committee is an essential part of the credit union and is accountable to the CCU membership only. This committee is obliged to prepare and present a report for the Annual General Meeting for the financial year 2015-2016.?The Supervisory committee has carried out quality recognised?tests on the credit union, throughout the year, and is pleased to report that no issues of concern came to light that required reporting either to the board of directors or to the membership. We also worked with the Compliance Officer testing our compliance ability, up to regulators requirements, and we are pleased to report that as of 30th?September 2016 we had reached the Gold Standard as per our trade body guidelines. There has been a 100% representation of the Supervisory Committee members at CCU board meetings and we also attended many Leadership Team meetings as observers. The Supervisory Committee gives thanks to our employee team for their full cooperation and assistance in carrying out our responsibilities during what has been a busy year with an increased volume of transactions. My personal thanks go also to Ken Jackson who expertly does most of our number crunching.?Charles Sim, Chair of Supervisory CommitteeKen Jackson, Committee MemberNominations Committee - Report to the 2017 AGMSince the last AGM, the board has established a Nominations Committee made up of Chris Smith, Karen Knott and Rebecca Hamilton with Claire Dalton as Secretary. This committee meets three times a year and its remit is to keep the board size, composition and skills under scrutiny, and where appropriate, undertake the recruitment of new directors to the CCU board. This year, we have recruited and co-opted David Fawell as a new board director and we’re in contact with two individuals who have expressed an interest in joining the CCU Board. If there are any members who are interested in doing some voluntary work for the credit union, we have a variety of different roles, whether it be on the board of directors or one of the Committees – Credit, Supervisory or Lottery then please come and speak to us at the end of the meeting or contact the office for more information. Election of DirectorsClaire Dalton ACISElection address for re-appointment to the Board of The Co-operative Family Credit UnionI have worked for the Co-op Group for over 10 years in the Secretariat Department. I am a qualified Chartered Secretary who provides professional company secretarial support to subsidiaries and committees across the Group and Co-op Insurance. As well as working to ensure statutory and regulatory compliance across the Group, I work closely with other business functions in the Group on numerous projects including acquisitions, mergers, corporate restructures and finance projects. I am the Company Secretary of a number of subsidiaries within the Group.I have served as Secretary of the Credit Union for three years and am very proud to be part of this exciting organisation. If re-elected, I hope to continue bring to the Board of the Co-operative Family Credit Union my skills and experience from working in corporate governance best practice. The Co-operative Family Credit Union has clear aims and values and I look forward to continuing my involvement in this worthwhile organisation within a growing sector.David FawellElection address for appointment to the Board of The Co-operative Family Credit UnionI have worked in personal finance for 36 years mainly at the Co-operative Bank with significant roles in marketing, personal loans and credit cards, and payments. I have had a great deal of exposure to the rest of the banking industry; holding directorships at Visa UK, CHAPS and the UK Cards Association and was a member of the Link ATM Scheme Council. I left the Bank at the end of 2015 and now undertake some part-time consultancy work as well as looking to support the credit union.I am a strong supporter of the Co-operative approach and in these very challenging times, the role of the credit union is ever more important – providing fair and affordable loans and offering a membership approach to personal finance. I look forward to this new challenge of being involved in the Co-operative Credit Union and helping it to grow and support more members across the movement.David A Dickman. FCIB.Election address for re-appointment to the Board of The Co-operative Family Credit UnionDavid retired from mainstream UK Banking in 2004 after having worked for The Co-operative Bank & Unity Trust Bank for over 43 years. He undertook a number of senior executive roles @ both Banks - during his career he gained a wealth of experience in both retail and corporate banking. Establishing himself as a key business leader with a proven track record in specific and strategic business development. Being creative and innovative with regard to product development and niche sector development. David is a strong advocate that people matter most and feels that individuals respond to dynamic leadership with clear values & principles.Since retirement, David has remained close to the financial service sector by his involvement with The Co-operative Credit Union where he is currently a Vice Chair and over the years has fulfilled the key roles of Chair and Chair of the Credit Committee. He was also involved in setting up Cornerstone the service delivery company for Credit Unions. In addition to his work with CCU, David is involved with the Plunkett Foundation; an organisation promoting cooperative solutions to tackle rural poverty. In 2008 he was awarded an Honorary Degree from Salford University.Married to his wife Vivien for 47 years, David has two sons Andrew & Mark who are employed in the NHS & University sectors. A lifelong Manchester City supporter, he is enjoying their success after many years of suffering.Andy OldaleElection address for re-appointment to the Board of The Co-operative Family Credit UnionI have worked for the Co-op Group in Senior Finance roles for 20 years and have served on the Board of the Co-operative Credit Union as Treasurer for almost 18 of those.I enjoy being part of the Credit Union movement because they encourage people who might not otherwise save to save (I’m one of those) and are an ethical alternative to certain organisations that charge criminal interest rates to people who most need financial help.? They are also owned by the members which is clearly a better way of doing business!Outside of work and the Credit Union, I’m an avid supporter of Sheffield United F.C (much to the dismay of our Credit Union Chair!)Election to Credit CommitteeRebecca Hamilton (Chair)Adrian SmithiesJohn RuddElection to Supervisory CommitteeCharles Sim (Chair)Kenneth Jackson ................
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