To ask the Chancellor of the Exchequer, when he plans to allow credit unions to (a) provide loans for members to buy cars, (b) offer insurance products to members and (c) offer credit cards; and if he will make a statement.
17 November 2020
The Government recognises the vital role credit unions play in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders.
The Chancellor announced at Budget earlier this year that the Government intends to bring forward changes to the Credit Unions Act to allow credit unions to offer a wider range of products and services. This will be done at a future legislative opportunity. The Government is carefully considering options before bringing forward legislation to ensure that we are delivering reforms which meet members’ needs and support the development of the credit union sector.
Fair4All Finance, the independent body set up to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and community development finance institutions in England through the coronavirus pandemic. Fair4All Finance has also launched its Affordable Credit Scale-up Programme, designed to provide tailored support to sustainably scale affordable credit.
The Government has no plans to require large employers to offer payroll deductions to allow employees to join and save with a credit union.
In Budget 2018, the Government announced a prize-linked savings pilot called PrizeSaver. This is currently operating in 15 credit unions across the country, helping to support the sector through increased membership, awareness and deposits, as well as encouraging participants to build up savings to help them cope with financial shocks. The pilot is scheduled to end in March 2021. The Government has no plans to allow credit unions to offer Premium Bonds or other National Savings and Investments products.