The government remains committed to supporting credit unions, which provide vital services to financially under-served communities and contribute to the diversity of the UK’s financial services sector.
Government engages closely with representatives of the credit union sector throughout the UK to understand how credit unions may best be supported. This includes speaking to Northern Ireland specific trade bodies and maintaining an ongoing relationship with the devolved Department for Economy in Northern Ireland to understand any issues specific to Northern Ireland’s credit union sector.
Government’s engagement with the credit union sector includes ongoing consideration of its legislative framework. For example, in 2014 Government conducted a Call for Evidence (‘British Credit Unions at 50’) on credit unions. Several respondents asked for changes to the legislation governing credit unions, and in its response, Government committed to actively consider legislative changes in the next Parliament. At Autumn Budget 2017, Government committed to raising the geographical common bond limit for credit unions from 2 to 3 million. This change came into effect in April 2018.
All changes to credit union legislation must be considered alongside the need to maintain an appropriate regulatory regime for credit unions. A looser legislative framework would likely require increased regulation which might be inappropriate for small, community based institutions.