Financial Services Bill to Unlock Growth in Credit Unions Presented to Parliament

Tuesday 23 January 2024

A bill to enhance the competitiveness of the UK financial services sector was introduced to UK Parliament this week, including draft legislation to reform the Credit Unions Act 1979.

The Financial Services & Markets Bill aims to implement the government’s vision for an internationally competitive financial sector post-Brexit, that maintains high levels of consumer protection. The Bill includes the planned reform of the Credit Unions Act 1979 to enable credit unions to expand their product offering. If the draft legislation passes through Parliament as proposed, credit unions will be able to offer new products and services, including conditional sale agreements, hire purchase agreements and insurance distribution activities.

The Bill implements the outcomes of the Future Regulatory Framework Review, giving the financial regulators greater responsibility for setting the requirements for UK financial services, and for the first time, a new secondary objective to promote the growth and competitiveness of the UK economy including the financial services sector. This will complement the regulators’ existing objectives of ensuring the safety and soundness of firms, protecting and enhancing the integrity of the UK financial system, promoting competition in the interests of consumers, and ensuring that consumers receive an appropriate degree of protection.

As part of this approach, the government will ensure greater financial inclusion through powers enabling credit unions, which provide low-interest forms of credit, to offer a wider range of products to their members.

ABCUL CEO, Robert Kelly, commented on the bill stating: “ABCUL welcomes our sector’s inclusion in the financial services bill. The Association will continue to liaise with HM Treasury in a pro-active basis to monitor progress on the days and weeks ahead.”