To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic on the credit union sector in the UK.
21 December 2020
The Government recognises the vital role of credit unions 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. In April 2020, the Economic Secretary wrote to credit union trade bodies to thank frontline staff for their efforts to continue to provide essential services to their members.
HM Treasury officials have regularly engaged with the Financial Conduct Authority and Prudential Regulation Authority to understand the impact of the COVID-19 pandemic. The Economic Secretary has also engaged with representatives from the credit union sector through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period.
Fair4All Finance, the independent body set up by Government 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 during the COVID-19 pandemic. On 20 May, the Government announced that additional funding through the dormant assets scheme would be released immediately to Fair4All Finance. This includes an expanded Affordable Credit Scale-up Programme, which aims to improve the access and availability of affordable credit, and which I expect to be of benefit to credit unions.