Labour MPs Highlight the Role of Credit Unions in Supporting Inclusive Lending

Thursday 15 January 2026

A new proposal from Labour MPs has highlighted the role of banks in supporting lending to low-income communities and small businesses, including through closer partnership working with credit unions and community lenders.

The proposals, reported by The Guardian and Co-operative News, explore how banks can build on existing activity to help strengthen access to finance for underserved communities and smaller enterprises. They recognise the contribution of credit unions and community lenders in promoting financial inclusion and supporting local economies.

As part of this wider discussion, Gareth Thomas MP has brought forward a 10 Minute Rule motion and been passed in the House of Commons on the proposed Fair Banking Act. The Bill seeks to encourage greater consistency and transparency in lending, while supporting inclusive growth and helping to reduce the poverty premium often faced by people on the lowest incomes when borrowing money. The proposals also highlight how improved access to fair finance can help reduce reliance on illegal money lending, support small businesses to start and grow, and enable local, ethical lenders – such as credit unions – to scale up their impact across the UK.

Credit unions already play a critical role in providing fair, affordable finance at a local level, working alongside other providers to support individuals and businesses who may find it more difficult to access support through mainstream banking channels. Recognition of this work by policymakers is an important step towards a more inclusive financial system.

Commenting on the proposals, Matt Bland, Chief Executive of ABCUL, said: “This is an encouraging recognition of the vital role credit unions play in expanding access to fair, affordable finance. With the right support, credit unions can do even more to serve small businesses and communities who struggle to access the support they need from mainstream banking.”

ABCUL looks forward to ongoing dialogue with policymakers, banks and community lenders on how partnership approaches can continue to evolve, helping to ensure access to ethical and affordable financial services for people and businesses across the UK.

Further coverage of the proposals is available from The Guardian and Co-operative News.