Parliament approves changes to Credit Unions Act 1979
08 Nov 11
Credit unions across Britain have welcomed news that Parliament has today (8th November) approved changes to legislation which will free up credit unions to reach many more members, including community groups and businesses.
A Legislative Reform Order, which makes changes to the Credit Unions Act 1979, has been approved by Parliament and new rules that enable credit unions to compete more effectively with banks and other lenders will be in place by January 2012.
Mark Lyonette, Chief Executive of ABCUL said: “Credit unions in Britain are delighted that legislative reforms have been agreed by Parliament which free up the sector to compete on a more level playing field. ABCUL has campaigned long and hard for these changes so we’re happy that credit unions will be able to use the new powers from the New Year.
Chair of the All Party Parliamentary Group on Credit Union, Damian Hinds MP said: “I’m very pleased that the LRO has now been made. It opens up so many new possibilities for the sector to evolve, innovate and grow. The regulatory changes will help credit unions work more effectively with partners including housing providers and employers, and encourage more people to develop a savings habit.”
The credit union sector in Britain is small compared to other countries such as the United States and Canada, where over 40% of the populations belong to a credit union. Credit unions in Britain have, up to now, been hampered by outdated restrictions which limit who can join, what services they offer and which places they operate in.
The Order makes a number of changes, including allowing credit unions to provide services to community groups, attract investment from local businesses and extend services to new groups, including housing association tenants and employees. Credit unions will also be able to pay interest on savings, instead of a dividend, so people will more easily be able to compare rates.
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