Jamie Carpenter,
Regen.net,
24 July 2008
Credit unions would be able to offer interest on their members' deposits under proposals contained in a consultation document published yesterday by the Treasury.
Currently, credit unions are unable to offer interest on their members' deposits. The consultation document says that this restricts credit unions' ability to attract new members and puts them at a disadvantage in the savings market.
The consultation also proposes removing restrictions to on the membership criteria of credit unions.
It proposes removing a requirement which stipulates that credit union members must be united by a "common bond", such as living in a particular neighbourhood or working for a particular employer.
The bond would be replaced by a new "field of membership test" to allow credit unions to use more combinations of membership qualifications.
Abcul chief executive Mark Lyonette said: "I'm very pleased to see the publication of these proposals as it means that credit unions are now one step closer to getting the legislation they need.
"With legislative change, the potential for credit unions to reach out and meet the needs of many more people is immense."
Proposals for a Legislative Reform Order for Credit Unions and Industrial & Provident Societies in Great Britain is available here
