Financial Secretary to the Treasury, Mark Hoban, today confirmed that a deregulatory package designed to help credit unions and co-operatives compete and grow more effectively has completed its Parliamentary passage. The Legislative Reform Order (LRO) will come into force on 8 January 2012 and represents an important part of the Government’s commitment to promote mutuals.
The changes are far-reaching in their potential to encourage future growth and will help credit unions and co-operatives in a number of ways, including by:
• enabling credit unions to accept new types of members, such as partnerships and limited companies;
• allowing interest to be offered on deposits;
• amending common-bond and membership requirements to allow expansion, consolidation and merger; and
• giving societies the flexibility to choose their own year ends and removing the requirement to have interim accounts audited.
Mark Hoban said:
“I want to see credit unions grow to meet the needs of their members and communities they serve. The LRO is key to that and I am pleased that it has now passed through Parliament. I look forward to hearing how credit unions will use these new powers when they come into force in January.”
Mark Lyonette, Chief Executive of the Association of British Credit Unions (ABCUL) said:
"Credit unions in Britain are delighted that legislation reforms have been agreed by Parliament which free up the sector to compete on a more level playing field. ABCUL has campaigned long and hard for these changes, so we're happy that credit unions will be able to use the new powers from the New Year."
Notes for Editors
1. The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 was approved by Parliament on 8 November 2011.
2. There are 428 credit unions in Great Britain and membership is expected to exceed 1 million in 2012. Industrial and provident societies (Co-ops) have around 23 million members and £120 billion assets.
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