On 24 May 2022, in a speech delivered at the Association of British Credit Unions annual conference, John Glen, Economic Secretary to HM Treasury, announced reforms to the legislative framework for credit unions.
In the speech, Mr Glen announces that the forthcoming Financial Services and Markets Bill (the Bill) will contain amendments to the Credit Unions Act 1979 concerning:
- Products and services. The Bill will include a new option for credit unions to adopt, to allow them to offer hire purchase, conditional sale agreements and insurance distribution services to their members. Mr Glen notes that credit unions wishing to sell these products will need to ensure compliance with regulatory requirements and seek the necessary permissions from the regulators.
- Corporate governance. The Bill will make minor amendments intended to support best corporate governance. These will include a legal requirement for credit unions to submit annual accounts to the FCA and express permission for credit unions to temporarily lend to and borrow from other credit unions, even when there is no membership link.
This follows a government announcement what was made in March 2020 in the spring 2020 budget that it would amend the Credit Unions Act to allow credit unions to offer a wider range of products and services to their members.