LONDON–New rules governing credit union membership at credit unions in the U.K. are set to go into effect, lifting an unusual growth cap on CUs in the country.
Credit union membership growth has been limited to at 3% monthly. But now, government reforms will enable larger credit unions by raising the potential membership cap for locality-based organizations – which is 79% of all CUs in the country, from three million to 10 million, according to Yahoo Finance.
“This aims to facilitate their growth and mergers,” the report stated. “Crucially, students will now also be eligible to join, alongside those living or working in the designated area.”
Additional Changes
Other changes include:
- Members will also be able to stay with or join their credit union after retirement as full members.
- Credit unions will be able to admit members’ relatives even if they do not live in the same household.
The changes are part of wider work to help improve financial inclusion, Yahoo Finance said, adding that the government will legislate to make the reforms as soon as parliamentary time allows.
Economic Secretary to the Treasury Lucy Rigby said: “We’re delivering on our manifesto pledge to grow the mutual sector by backing credit unions to expand and serve more communities,” Economic Secretary to the Treasury Lucy Rigby said in a statement.
‘Freedom to Grow’
Lakshman Chandrasekera, chief executive London Mutual Credit Union, told Yahoo Finance, “Raising the common bond cap to 10 million gives credit unions the freedom to grow and keep wealth within the communities we serve. In London, we see first-hand the demand for fair, affordable finance.”
Matt Bland, CEO of the Association of British Credit Unions, told the publication, “This announcement marks an important milestone in the government’s recognition of the vital role credit unions play in strengthening financial resilience and improving financial inclusion across Great Britain. Reforms to the common bond will enable credit unions to expand their reach, serve more communities and work together more effectively to deliver sustainable growth.”
