The Government has taken significant steps to support stakeholder banks. We more commonly refer to stakeholder banks as mutually-owned financial service firms such as credit unions, building societies and mutual savings banks.
The Government has encouraged the growth of the credit union sector by increasing the maximum interest rate that credit unions can charge on loans from 2% to 3% per month; investing £38m in the sector through the Department of Work and Pensions’ (DWP) Credit Union Expansion Project; ensuring that universal credit and pensions payments can be paid into any credit union account; and launching a Call for Evidence which allowed all credit unions, regardless of size or influence, the opportunity to contribute their vision for the future of the sector to the wider debate.
This Government has supported the building societies sector through a number of initiatives including: carving out building societies from the Independent Commission on Banking’s ring-fencing regulations; extending ISA eligibility to Core Capital Deferred Shares; allowing building societies to create floating charges for the first time; and applying a £25m sector-specific allowance to carried-forward losses for Corporation Tax.
The Airdrie Savings Bank is the only remaining example of a mutual savings bank in the UK. At the Summer Budget the government announced that savings banks established under the Savings Bank (Scotland) Act 1819 will benefit from the same £25m carried-forward loss allowance for Corporation Tax as the building society sector. This will be backdated to 1 April 2015 and is being actioned through the Finance Bill 2015.