Credit Unions: Reform
The question
To ask the Chancellor of the Exchequer, what progress her Department has made on reform of the credit union common bond.
Answered by Lucy Rigby
The government is a strong supporter of the mutual sector, including credit unions, and is working to support its growth in line with the manifesto commitment to double the size of the sector.
On 18 March, the government announced plans to reform the credit union common bond in Great Britain by:
- Increasing the potential membership cap on the locality bond from 3 million to 10 million, which will significantly expand the potential size of locality-based credit unions, which make up 79% of the sector, and reduce uncertainty around merger activity.
- Allowing credit unions to admit students to locality-based credit unions, if not otherwise eligible through residence or work.
- Expanding eligibility for members' relatives to allow credit unions to admit relatives of qualifying members regardless of whether they share a household.
- Allowing credit unions to retain retired members as fully qualifying members.
These reforms will help more people get access to fair loans and a safe place to save, so families have a real alternative to high-cost credit.
Full details of the government’s plans have been published in a call for evidence response available on GOV.UK.
The government will legislate to give effect to these reforms as soon as parliamentary time allows.
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