Government launches consultation on the future of credit unions

A consultation has been launched by the Treasury to help map the thoughts of credit union stakeholders on the sector’s future. The call for evidence marks the 50th anniversary of credit...

consultation has been launched by the Treasury to help map the thoughts of credit union stakeholders on the sector’s future.

The call for evidence marks the 50th anniversary of credit unions in Britain and was launched by Treasury minister Andrea Leadsom at a reception of the all party parliamentary group on credit unions.

The consultation, which is open until 1 September, aims to gather views from credit unions, the private sector and the wider society on how the government could help achieve their vision for the future of the sector.

The call for evidence includes a number of questions related to the structure of credit unions, the procedure for setting up new credit unions, the common bond and wider rules around membership, limits imposed by legislation and the reasons preventing some credit unions from offering loans to small businesses in their communities.

Treasury minister Andrea Leadsom.
Treasury minister Andrea Leadsom.

In launching the call for evidence, Ms Leadsom said that she was challenging credit unions to set out their vision for the future and suggest how the government could help support this vision. She added that the wider society also had to consider how they could best support credit unions and how the government could encourage and facilitate this.

“In its 50th anniversary year, Britain’s credit union movement has a proud record of supporting its members through thick and thin. Over the next 50 years, I want to see credit unions continue to grow and play a full part in a more competitive and diverse financial services landscape for their customers,” she said.

Mark Lyonette, chief executive of the Association of British Credit Unions (Abcul) also said that he welcomed the consultation. He added that the trade body would work with their members to provide feedback and also with the government to create “an even better environment for credit unions to operate in”.

He said: “Recent changes in legislation, a major Government funding programme and valuable support from high profile supporters means an exciting situation for British credit unions in our 50th anniversary year.  As we face new opportunities and challenges this is an ideal time for us to review what we need as a sector to continue growing and thriving.”

The responses received will be used to help the government initiate policies, legislation and regulations for credit unions.

What are the questions being asked?

  1. Do you agree that the basic structure and objects of a credit union remain appropriate? What changes, if any, are required?
  2. Is the procedure for setting up new credit unions appropriate? What changes, if any, are required?
  3. Are the concept of the common bond and the wider rules around membership still relevant and valued by the credit union movement? What changes if any need to be made and what would be the benefits and risks?
  4. Are the various limits imposed by legislation at the right levels to allow credit unions flexibility to serve and attract all kinds of members? What changes, if any, should be made?
  5. What other help can government give to assist credit unions to attract and retain a wide range of customers and have confidence to serve all customers effectively? What changes can be made to improve this?
  6. What reasons have prevented some credit unions from offering loans to small businesses, including sole traders, in their communities? What could be done to encourage more activity in this area and allow credit unions a greater role in supporting local small and micro enterprises?
  7. Is there anything that government can do to improve, simplify or clarify the legislation to make rules changes and the Boards power to act easier to navigate and meet the needs of their members?
  8. What else can the government do to encourage wider knowledge and understanding of credit unions?
  9. What can the government do to bring about further efficiencies and stability to the credit union movement?
  10. Should the government do more to ensure that credit unions have the flexibility to run their business but protect members by ensuring sound financial management?

Click here to read the full details behind the consultation. Credit union members can respond to the consultation by emailing [email protected].

 

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