CWU MORTGAGE ASSISTANCE

[TrueBlueTerrier]

No. 972
Ref: TK/sn/PM
Date: 05/11/2010



To: All Branches

CWU MORTGAGE ASSISTANCE

Branches will recall that CWU General Conference 2010 debated and carried the following two motions in relation to the above.

Motion 56, that stated:-

Conference agrees that the revelations in the media about cheap mortgages for National Officers at the apparent rate of only 0.375% caused anger amongst our members.

Conference recognises that on occasions there is a legitimate need to assist Officers with resettlement loans, but Conference believes that there should be clear and transparent guidelines to ensure a full understanding amongst our members.

Conference therefore agrees that the Finance, Organising and Strategy Committee will draw up guidance which must adhere to the following principles:

1. Ensure that the interest rate fixed for any mortgage is not advantageous when compared with other mortgage products on the open market that might be accessible by CWU members. Such a rate could be set at the best mortgage product available at the time the mortgage was requested.

2. Ensure that such mortgages would not normally be offered when an Officer is only moving home within the same town/city other than in exceptional circumstances.

3. Ensure that the Union does not lose sight of the need to ensure that a National Officer may have legitimate need of a mortgage provided by the Union and that this principle be defended by the CWU.

Once the draft guidance is drawn up this will then be discussed and agreed by the NEC in the normal manner.
Western Counties
Devon and Somerset
Motion 57 that stated:-

That following the Times On Line article dated 5th October 2009 titled “Posties’ Leaders Use Union Cash For Homes“ conference agrees that existing agreements/contracts concerning personal financial transactions such as Mortgages/Loans etc between the CWU and its officers be published to branches in a report in time for the issue to be debated at Annual Conference.
It further agrees that all future publications of the CWU Annual Report and accounts show the outstanding loan and interest rates charged by the CWU on each property financed by the accounts.

London West End Amal
South East London Postal and Counters


The NEC has now determined how both of these policies will now be implemented. These are laid out as follows.

MOTION 56

The first issue of note here is that the CWU now has a clear, unequivocal and transparent policy, determined through our own democratic processes, that mortgage assistance is a legitimate practice and is therefore an appropriate use of CWU funds. The reasons for this have been discussed in the past but are worth restating as it may well be that we find ourselves subject to attack from the press and media in this regard once again.

Lay members of the CWU are entitled to stand for election to officer positions at CWU HQ. Given the comparatively low pay of rank and file members of the CWU not all those who are successful could be in the position of either having an existing mortgage or having the disposable income to move onto the property ladder within the London area if they wish. Indeed, previously, postal workers have been elected to national office and have lived in rented council accommodation prior to election. It is entirely correct that having been asked by the membership to represent them at national level the union offers assistance.

Motion 56 clearly establishes that principle and allows further assistance to be offered “in exceptional circumstances” should there be a need for someone to move home with the same town/city.

The motion sought the FOS and then NEC agree “clear and transparent guidelines” around this process.

In order to carry out the terms this motion the following will now become the procedure as requested with immediate effect.
PROCEDURE FOR NEW MORTGAGE APPLICATIONS

Request

All requests for mortgage assistance must be made in writing to the Senior Deputy General Secretary. Such requests must state the amount to be borrowed and the period over which the loan will run.

Interest Rate

The CWU will engage an Independent Financial Advisor at the time of any request received for a mortgage who will provide the CWU with a report on the various interest rates available at the time of the request. The report, together with a recommendation from the IFA as to the best mortgage rate available on the open market will take into consideration the sum of money requested to be borrowed and the period of time such a loan will be repaid. (These are two of the main determining factors in any mortgage offer on the open market).

Amount

The CWU will also use the IFA to advise on the current maximum loan to salary ratio being offered on the open market.

Recommendation

Once the above information is received the Senior Deputy General Secretary will produce a report with a recommendation on a mortgage offer to be made.

Decision

The Senior Deputy General Secretary will provide the report as detailed above to the FOS and then to the CWU Trustees who, in line with the conference policy, will determine the final detail of the offer to be made. The FOS and then the Trustees will take into consideration, the IFA report and recommendation, the SDGS report and recommendation but above all ensuring that we (CWU) adhere to and defend, as outlined in Motion 56, the principle that a National Officer may have legitimate need of a mortgage provided by the Union and that this principle be defended by the CWU.

Legal Charge

Once an offer has been made and accepted the CWU will instruct Solicitors to process the formal documentation that places a legal charge over the property purchased in the name of the CWU until such time as the mortgage is repaid.

Exceptional Circumstances

Should an officer who wishes to move home within the same town/city and who would not normally be offered such assistance make a request for such help then they would need to detail why the case should be viewed as exceptional prior to the above process taking place. Such a request will be placed before the FOS and the CWU Trustees for a decision prior to producing the IFA and SDGS financial report and recommendations.

Termination

Should a CWU Officer subsequently leave CWU employment or should a CWU Officer move from the original location where the mortgage applies then they will, unless exceptional circumstances* apply, repay in full the outstanding balance on the loan within 12 months of either the termination or relocation.

*To be determined by the CWU Trustees.

MOTION 57

Motion 57 deals with the reporting of any mortgages/loans between the CWU and its officers.

For the sake of clarity loans between CWU and its officers refers to CWU National Officers and not other local officers or officials. Secondly as the only existing “loans” to CWU Officers are mortgages then “mortgages/loans” means mortgages.

The motion calls for, a report in time for conference of the existing mortgages, as clarified above and a clearer report in the Annual Report and Accounts showing the outstanding loan and interest rates.

The NEC has agreed the following three courses of action in that regard.

1

An LTB will be published to all branches at the earliest opportunity* at the beginning of each year that will list the following.

The name and position held of the CWU national officer in receipt of a mortgage.

The amount outstanding at the end of the previous calendar year.

The interest rate currently being charged against that mortgage.

(* subject to internal accounting processes being completed)

2

The CWU Annual Report will reproduce this same information.

3.

The CWU Annual Accounts will move from incorporating mortgages to CWU Officers under the “Notes to the accounts” paragraph 5 “Long-term loans (secured)” to listing the final audited position on each mortgage. That list will detail the information as laid out in 1 and 2 above, audited.

CONCLUSION

The NEC believes that the course of action outlined herein implements the policies carried at CWU General Conference and now allows the CWU to move forward on this united. The NEC makes this final point as it has been reported back to HQs that at least one major national newspaper received information on this matter directly from a CWU Branch and on Branch headed notepaper.

The NEC is clear and unequivocal that the principle established in Motion 56 is a legitimate action that the CWU undertakes. It is the (re-established) policy of the CWU as determined by a democratic vote at an annual general conference. Finally and most importantly, both internally and externally, the CWU will defend this principle as instructed by our general conference to do so.


Tony Kearns
Senior Deputy General Secretary