Credit Unions – Parliamentary Written Answer

Mr Bain: To ask the Chancellor of the Exchequer what recent discussions his Department has had with the Association of British Credit Unions to broaden the range of financial services provided by them to their members in areas of social deprivation.

Steve Webb: I have been asked to reply on behalf of the DWP. DWP is providing funds of up to £38 million to support credit unions. A contract has been awarded to the Association of British Credit Unions Limited (ABCUL) to develop the sector. This will support participating credit unions to become financially sustainable while offering an increased range of financial services to a million more consumers, many of whom reside in areas of social deprivation. Since the commencement of the contract on 1 May 2013 my officials have held numerous meetings with ABCUL, both informally and as part of the formal commercial governance.

Law Change to Help Credit Unions Extend Services to Social Tenants

Credit unions across Britain have welcomed news that Parliament has approved changes to legislation which will free up credit unions to reach many more members, including community groups and housing association tenants. A Legislative Reform Order (LRO), which makes changes to the Credit Unions Act 1979, has been approved by Parliament and new rules that enable credit unions to compete more effectively with banks and other lenders will be in place by January 2012. The Order makes a number of changes, including allowing credit unions to provide services to community groups, attract investment from local businesses and extend services to new groups, including housing association tenants and employees. Credit unions will also be able to pay interest on savings, instead of a dividend, so people will more easily be able to compare rates. Read more on the Association of British Credit Unions website.