A COMMUNITY bank dedicated to the city of York has officially opened with 30 supporters signing up as members at the launch.

York Credit Union promises to offer a financial alternative to high-interest doorstep lenders and aims to attract 1,000 members in its first year.

Its launch comes a day after The Press revealed that the number of people declaring themselves bankrupt in York had doubled from 44 in the first quarter of 2005 to 89 this year.

The Lord Mayor of York, Coun Janet Greenwood, and the Sheriff, Coun Gilbert Nimmo, were among well-wishers to celebrate the credit union's first day of business.

Guests at yesterday's launch at the National Railway Museum also included council and health bosses, church and trade union leaders, and representatives from housing associations, and the business, community and voluntary sectors.

Also present was Mark Lyonette, the chief executive of the Association Of British Credit Unions, and a member of the Government's Financial Inclusion Taskforce.

Mike Horncastle, credit union manager, said the new bank was the result of "considerable personal effort" by many people, such as a study group which had been developing the service for more than eight years.

He thanked the organisations and businesses which had lent support. "Without their help, there simply wouldn't be a credit union to speak of."

He singled out City of York Council, the Joseph Rowntree Charitable Trust and the Tudor Trust which, together, have provided more than £150,000 of financial and in-kind support.

Mr Horncastle said: "York Credit Union is an addition to the financial services available in York, and we are available to anyone who lives or works in the city.

"We offer an alternative to high interest-charging lenders and a safe savings facility for anyone who uses our service."

He said it offered mutual financial support, co-operative working, secure savings and low-cost loans based on an individual's ability to repay.

All surplus profits are returned to members as a dividend.

He said credit unions were highly regulated with directors and office holders being individually vetted.

Credit unions are members of the Financial Services Compensation Scheme, offering members the same protection as banks and building societies. They are also members of the Financial Ombudsman Service.

The union will offer a savings and then a loans service from mid-August.

The first Community Savings Point will be open tomorrow at the City Finance Office in Library Square, and then every Tuesday and Thursday.

Updated: 10:11 Wednesday, May 17, 2006