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Unholy union: FSA bans reverend and censures credit union

by Jun Merrett on Nov 12, 2012 at 11:02

Unholy union: FSA bans reverend and censures credit union

The (FSA) has publicly censured The Pentecostal Credit Union (TPCU) and banned a reverend for issuing £1.2 million of loans under its members’ names but channelling the money to a church organisation.

The regulator said this channelling was in ‘direct contravention’ of credit union rules, which state only individual members could borrow and not organisations.

As a result, the director Reverend Carmel Jones has been banned from the industry.

Balham-based TPCU has 1,600 members and previously made regular loans to the Church Organisation for property purchases and repairs, prior to coming under FSA regulation in 2002.

However, the FSA warned TPCU to stop this practice with immediate effect after an assessment in 2003, because the loans may not have been legally enforceable.

In 2006, Jones wrote to the FSA and proposed to reinstate the loan system, but with either insurance indemnity for its members, or the creation of a corporate entity, of which members would be shareholders.

Despite the FSA warning Jones that both of these ideas were ‘unlawful’, TPCU made 20 loans to the Church Organisation between May 2007 and July 2011.

The FSA said TPCU’s failings ‘exposed its members to an excessive risk of financial loss,’ and that Jones approved 14 of the loans in question, and signed the cheques for the loan money in 12 of these cases.

The relationship between TPCU and the Church Organisation then broke down at the end of 2009 and the loan repayments stopped, leaving an estimated £670,000 outstanding.

Tracey McDermott, FSA director of enforcement and financial crime, said: ‘This is a disgraceful case of a credit union putting the interests of another organisation before those of its members. The FSA will not tolerate this conduct in the industry.

‘Credit unions are vital institutions for the communities they serve, and the members of The Pentecostal Credit Union deserved better.’

10 comments so far. Why not have your say?

Anitaki

Nov 12, 2012 at 11:31

...........with stuff of this magnitude going on, how can they find the time to deal with millions of people having their pensions churned, GARs lost, landbanking schemes, UCIS etc.

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Hickky

Nov 12, 2012 at 11:52

Ah Ha. When a beneficial orginisation that is run for the church contravenes FSA rules, hell has no fury like the FSA.

As normal, this regulator cannot help a church to set up a scheme that is not for personal gain, but will only notify when its own rules are contravened.

Then they get self important and make pronouncements on how they have banned a man of the church, thus demonstrating their own moral superiority.

Why can't the credit union rules allow payments to orginisations? 'Cause they can't. So there!

Have any members of the union sufferred? Has anyone lost money? Did the members know their money would help support the Pentecostal Church? I rather think so.

Well done FSA for taking 10 years to bring this obvious criminal and his wicked scheme to book.

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Twickers

Nov 12, 2012 at 12:04

the church an organisation ?- without its members just a building-usually I suspect owned under a bare trust/ with members as trustees/ and as stated above/ all members of the union surely must be church members/ a rose by

another name would be local political parites/ whose contribultions buy the

office building or pay the rent.

have an other Rev

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Sascha K

Nov 12, 2012 at 12:06

@Hickky

"Have any members of the union sufferred? Has anyone lost money? Did the members know their money would help support the Pentecostal Church?"

The answer to the first and second question is "yes". The members have lost £670,000.

And the answer to the third question is "no". The union's website states "The Pentecostal Credit Union (PCU) exists for the **sole purpose** [my emphasis] of improving the economic lives of its members" - nothing about your money being used to prop up the church.

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Barman

Nov 12, 2012 at 12:19

@Hickky the rules are in place to stop the members being exposed to additional risk. They lost £670,000! Do you not read these articles??

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Reverend Carmel Jones

Nov 12, 2012 at 12:53

God told me to do it and he has more power then the FSA!

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Julian Stevens

Nov 12, 2012 at 12:56

Next thing we know, the FSA will be confiscating his episcopal tool.

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philip spierling

Nov 12, 2012 at 12:59

What the lord giveth,,,,The FSA take away.

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Anitaki

Nov 12, 2012 at 13:11

@ the Rev Carmel

"............................. and he has more power then the FSA!"

The FSA disagree

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Jonathan Kirby

Nov 12, 2012 at 13:18

Should have had level 4 - no of this would have happened!

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