Credit Unions

HM Treasury written question – answered on 5th March 2018.

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Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

To ask Mr Chancellor of the Exchequer, if he will make an assessment of the effectiveness of credit union legislation; and if he will make a statement.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Government engages closely with representatives of the credit union sector to understand how credit unions may best be supported, including ongoing consideration of their 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 will come into effect from 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.

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