Financial Services Authority
Firm Reference No 436625
NFRN Credit Union Limited
08 Nov 11
Credit unions across Britain have welcomed news that Parliament has today (8th November) approved changes to legislation which will free up credit unions to reach many more members, including community groups and businesses.
A Legislative Reform Order, 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.
Mark Lyonette, Chief Executive of ABCUL said: “Credit unions in Britain are delighted that legislative 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.
Chair of the All Party Parliamentary Group on Credit Union, Damian Hinds MP said: “I’m very pleased that the LRO has now been made. It opens up so many new possibilities for the sector to evolve, innovate and grow. The regulatory changes will help credit unions work more effectively with partners including housing providers and employers, and encourage more people to develop a savings habit.”
The credit union sector in Britain is small compared to other countries such as the United States and Canada, where over 40% of the populations belong to a credit union. Credit unions in Britain have, up to now, been hampered by outdated restrictions which limit who can join, what services they offer and which places they operate in.
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.
New law for credit unions
08 Jan 12
Changes to the Credit Unions Act have come into force that will allow credit unions to change their rules to allow them to provide services to new groups and develop new services and partnerships.
The restriction that meant that everyone eligible to join a credit union had to have something in common has been removed. Credit unions are now free to extend their reach and work with organisations such as housing providers, employers and charities to bring financial services to new groups of people.
Credit unions will also be able to choose to provide services to community groups, social enterprises and businesses, helping organisations that need financial services and attracting investment into communities.
Paying interest instead of a dividend is also now an option for some credit unions, making their savings products much easier to compare.
“These changes are a major breakthrough in the delivery of credit union services to communities around Britain,” said Mark Lyonette, Chief Executive of ABCUL – the Association of British Credit Unions.
“The new rules mean credit unions can now compete more effectively with banks and other lenders to provide fair and affordable financial services to individuals and orgnisations. Credit unions will be able to reach many more people, helping them to develop a savings habit, which can only be good for communities.”
Speaking in November, Financial Secretary to the Treasury 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.”
More details about the changes can be found here http://www.abcul.coop/media-and-research/legislation
More details about how this providers new opportunities for housing providers, employers and other community organisations can be found here http://www.abcul.coop/credit-unions/newopportunities
04 Nov 11
Following the announcement that people will no longer be able to use Post Office branches to manage their National Savings and Investments (NS&I) savings products, ABCUL has called for credit union services to be made available through the Post Office network.
ABCUL Chief Executive Mark Lyonette said: “Many people rely on their local Post Office for simple cash based savings products that they have valued for many years. The prospect of a big reduction in such products available through the Post Office network leaves a big gap which credit unions would be very well placed to fill.
“Credit unions offer simple, safe savings products to nearly a million people across Britain, but access in many areas to these services is limited. With the potential investment in the sector that the Government is currently considering, credit union savings and affordable loan products could be made available through the Post Office network.
“This could make local and mutual financial services accessible to millions more people and ensure that the Post Office remains a valued provider of the products people need.”
ABCUL, the Association of British Credit Unions Ltd, is the trade body of which NFRN Credit Union Ltd is a member.
Many of the NFRN members who form part of our common bond are sub-postmasters who will have seen their businesses diminished by the government removal of National Savings and Investments (NS&I) savings products.
Barnardo’s calls for credit union services to be made available through the Post Office
04 Jan 12
A report from the respected children’s charity, Barnardo’s, has highlighted the plight of low income families forced to take out high cost credit agreements and calls for credit union services to be made available through the Post Office network.
The report, A Vicious Cycle: The heavy burden of credit on low income families, analyses the impact of high cost credit on low income families and provides shocking examples of how the poorest often pay most with one high-profile weekly-payment, rent-to-own store charging in excess of £1704 for a standard fridge-freezer compared with £430 for the same item at a well-known highstreet electrical retailer if paid for in cash.
The report identifies credit unions as key to ensuring a fair deal for those on a low income, stating: “Barnardo’s believes that now is a critical time for the future of the credit union movement. The DWP is due to announce its intentions on the modernisation programme for credit unions [...] and has already stated that it would ideally like to provide access to credit unions over Post Office counters.
“Making credit union services available through Post Offices could dramatically increase access to affordable credit, safe savings and other financial services for millions more people. This would mean that customers could walk into any of the 11,500 UK Post Office branches and join their credit union. [...] This should now be translated into a firm policy commitment with detailed timescales for implementation. The Post Office is one of the few organisations with the geographic coverage to be able to reach low income customers and offer a credible alternative to expensive, doorstep credit.”