Credit Unions Grow Their Membership with New Legislation

Changes to the Credit Union Act came into force January 8, removing the requirements that place a restriction on credit union membership.

The changes will not impact on the protection FSCS provides credit union members which will remain at £85,000 per person.

Credit unions will still have a ‘field of membership test’ to ensure that members have a common bond, but crucially credit unions will be able to provide services to a number of groups. This will allow them to offer membership to a wider range of people in the community.

The new legislation also means that for the first time, credit unions can provide services to businesses, community groups and social enterprises. They will also be able to offer interest on savings, instead of paying dividends to members and will be able to charge for additional services.

Mark Neale, FSCS Chief Executive said: “Credit Unions are an integral part of our financial system and provide beneficial financial support to their members.

“These changes will strengthen credit unions by giving them the opportunity to expand and will make them more accessible to individuals in the community that may not otherwise have access to financial support.”