To ask Mr Chancellor of the Exchequer, what recent steps his Department has taken to improve and promote access to credit unions.
23 May 2018
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. To improve access to credit unions, government has:
· In April 2018, announced increased funding for a scheme which incentivises credit union membership in areas at risk of being targeted by loan sharks. This will help vulnerable people to borrow and save with a safe and responsible financial provider, and promote credit unions as an alternative source of credit.
· At Autumn Budget 2017, announced that the credit union ‘common bond’ limit, which applies to credit unions whose membership is based around a local area, would be raised from 2 to 3 million. This change came into force in April this year, and will allow the larger credit unions to expand and help the sector to consolidate.
· In 2014, raised the statutory cap on the total interest a credit union can charge on loans from 2 to 3% per month. This has allowed credit unions to expand into new markets, and compete more effectively with other lenders.