New law for credit unions
08 Jan 12
Changes to the Credit Unions Act have come into force that will allow credit unions to change their rules to allow them to provide services to new groups and develop new services and partnerships.
The restriction that meant that everyone eligible to join a credit union had to have something in common has been removed. Credit unions are now free to extend their reach and work with organisations such as housing providers, employers and charities to bring financial services to new groups of people.
Credit unions will also be able to choose to provide services to community groups, social enterprises and businesses, helping organisations that need financial services and attracting investment into communities.
Paying interest instead of a dividend is also now an option for some credit unions, making their savings products much easier to compare.
“These changes are a major breakthrough in the delivery of credit union services to communities around Britain,” said Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions.
“The new rules mean credit unions can now compete more effectively with banks and other lenders to provide fair and affordable financial services to individuals and orgnisations. Credit unions will be able to reach many more people, helping them to develop a savings habit, which can only be good for communities.”
Speaking in November, Financial Secretary to the Treasury Mark Hoban said: “I want to see credit unions grow to meet the needs of their members and communities they serve. The LRO is key to that and I am pleased that it has now passed through Parliament. I look forward to hearing how credit unions will use these new powers when they come into force in January.”
More details about the changes can be found here http://www.abcul.coop/media-and-research/legislation
More details about how this providers new opportunities for housing providers, employers and other community organisations can be found here http://www.abcul.coop/credit-unions/newopportunities
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