Key reforms for credit union sector announced

Monday 15 January 2024

Key reforms for credit union sector announced

Last week, the Chancellor of the Exchequer announced in the UK Budget that Government will bring forward legislation which will enable credit unions to provide a wider range of affordable services to members than ever before including hire purchase and conditional sale agreements and insurance intermediation.

“The Association and credit unions across the country have been lobbying for legislative reform for years and we are ecstatic that our efforts have paid off” says ABCUL CEO, Robert Kelly.

Addressing the Annual Conference in Manchester, the Economic Secretary to the Treasurer, John Glen MP said Government was keen to support the sector but it was up to credit unions themselves to make the most of the new legislation. Praising credit unions for their authenticity and strong bond to local communities, Mr Glen said the sector could help parts of the society that other financial institutions cannot reach. Credit unions can also help tackle the scourge of loan sharks and payday lenders by winning the trust of low-income borrowers, as well as providing consumers with an ethical home for their savings.

What needs to happen to unleash the sector’s potential? The minister said credit unions should continue to cherish their values while offering a wider range of products to serve changing consumer needs and expectations. He encouraged credit unions to work together to develop solutions to shared challenges faced, harnessing latest technology, including open banking.

ABCUL Conference delegates also heard from Prudential Regulation Authority (PRA), who announced the outcome of the their consultation on capital which will reduce credit union capital requirements for the largest credit unions from Monday 16^th March. Commenting on this breakthrough for the British credit union sector, Robert Kelly said: “These measures are vital for credit union to maximise their growth and fulfil the sector’s potential to reach more people in the community to provide safe savings and affordable loans.

“This announcement follows several years of lobbying from ABCUL and credit unions.. and this victory will be pivotal to realising the sector’s shared vision & strategy moving forward, together.”

Speaking of ABCUL’s ‘Vision 2025’, the Minister, John Glen MP said “It represents a clear set of objectives around which credit unions can unite, “I’m encouraged by what I’ve seen and heard in recent weeks. You have the people, the passion and now you have a plan, too.”

Source – Coop news