ABCUL Chief backs'credit union changes'

Ms Ussher, MP for Burnley, told the newly-launched all-party Parliamentary Group on Credit Unions: “We want to make it easier for families to access the affordable credit on their doorstep that is offered by credit unions, rather than having to turn to more expensive schemes, or at the extreme end, illegal loan sharks.

“We want to give all mutuals the chance to flourish — to liberate them to compete more fairly and freely with companies, so that common ownership becomes a genuine alternative to the company form, and for the sector to continue to make a difference to even more people across Britain.

“Co-operatives and credit unions make a significant contribution to our economy, and to our society. Bringing the legislation that governs them into the 21st century will remove some of the outdated and unnecessary restrictions that are limiting mutuals from growing and competing.”

Changes planned in the Legislative Reform Order in relation to credit unions include:

• Liberalising membership criteria and radically changing the “common bond”, so that credit unions can provide their services to a wider range of people

• Making it possible for groups, rather than just individuals, to become members

• Allowing unions to pay interest on deposits

• Removing the limit on non-qualifying members

• Allowing credit unions to charge the market rate for services such as chequebooks and money transfers.

The following measures apply to both co-operatives and credit unions:

• Giving societies the flexibility to choose their own accounting year-ends

• Abolishing the requirement to have interim accounts audited

• Lowering the minimum age for being an officer of a society to 16

• Bringing the fee for a copy of rules up to date

• Making it easier for members to dissolve a society, subject to safeguards.

The Treasury will consult shortly on the proposed Legislative Reform Order, with a view to introduction next year. In the meantime, work will continue on preparing for primary legislation, so that further reforms can be introduced when an opportunity arises.

Ms Ussher’s statement was warmly welcomed by Mark Lyonette, Chief Executive of the Association of British Credit Unions (ABCUL), who told the News: “We’re delighted that legislation will be brought forward to modernise the way credit unions can operate. In particular, we are pleased by proposals to relax the common bond.

“This will mean that credit unions can offer their services to more people. Our aim is for credit unions to offer millions of people in the UK a trusted way to make the most of their money.”

• For more details, visit: www.hm-treasury.gov.uk.