NEWS & EVENTS
New Door Opens for UK Credit Unions
On the 8th November 2011, UK credit unions finally heard that the long awaited Legislative Reform Order (LRO) for Credit Unions and Industrial & Provident Societies, had been approved following its long journey through the Houses of Parliament and the House of Lords. The final step of the Parliamentary procedure has now been completed and is due take effect in January 2012, once the FSA has revised its regulatory rules and approved the credit union trade associations' model rules.
The regulatory changes offered by LRO, although not mandatory, will offer real benefits for the credit union movement as a whole, by removing some of the restrictions in the current legislative framework and allowing credit unions to choose to reach out to new members by serving more than one group of people. The previously restrictive common bond, will now be relaxed to allow credit unions to offer their services, for example to tenants of a housing association or employees of a national company, even if some tenants or employees live outside the geographical area that the credit union serves.
Credit unions will also be able to provide their savings and loans services to local unincorporated community groups, corporate businesses and social enterprises, giving them the opportunity to attract share capital and to lend to small businesses that may be unable to access funding through mainstream financial service providers.
Bill Hudson, Chair of NACUW said: "We have been waiting a long time for these regulatory changes to be approved and we know from our recently held Conference on International Credit Union day, that many of our members are keen to take advantage of the new opportunities that will be available to them, including having local businesses as signed up a members and the ability to spread their field of membership beyond the currently restrictive geographical borders in which they operate".
NACUW, along with all of the UK credit union trade associations, has played an integral role in the nurturing of the new legislative changes through its participation in the National Credit Union Liaison Group, which has met with the FSA on a regular basis over the past few years, to ensure the introduction of these new opportunities aimed at encouraging the long term sustainability of the credit union movement in the UK.
Be Prepared for the New Regulatory Reform Programme
At a Conference held on the 26th May 2011, hosted by the FSA and the Bank of England, credit unions, along with all other regulated deposit takers, were given an insight as to how supervision of UK financial market activity, would look from early 2013. Hector Sants, Chief Executive Designate of the Prudential Regulation Authority (PRA), told delegates that from 2013, the FSA would be replaced by two new bodies that would be responsible for the regulation of all deposit takers. The PRA would be responsible for prudential matters relating to the financial strength of deposit takers, with the Financial Conduct Authority (FCA) being responsible for governance and conduct matters linking to consumer protection.
A summary of the new regulatory proposal can also be downloaded here.
Next meeting with the FSA
The next meeting between the National Credit Union Liaison Group and the FSA will take place on the 29th June 2011. If there are any regulatory issues that you wish NACUW to raise at this meeting please contact Bill Hudson on .
Credit Union Awards for Excellence
There were six awards, recognising excellence in the areas of:
- community mobilisation
- credit union education
- active partnerships
- an award for a single benefactor
After the credit crunch.... what next?
All of us in the credit union world are acutely aware of the impact and implications of the current financial turmoil. But could our economic architecture be in fact fatally flawed? Are we witnessing the end of the so called 'free market model'? Should we be planning for a very different future where credit unions and other community finance institutions become the new banks on our high street? Whilst many economists are predicting a recession in the traditional sense, others are questioning whether or not we are heading for something far worse. And if that is the case is now then the time to demand that we should be looking for a fairer and saner model, rather than trying to prop up the older corrupt one.
The new economics foundation is one organisation that is making such a call and has recently been advocating a 'Green New Deal' to address the financial meltdown, alongside climate change and the imminent peaking of many key resources. Now as part of that process nef are prioritising 20 steps that need to be made in order to rebuild a better economy. One of these steps is strongly advocating credit unions and the Community Banking Partnership approach. See how we can be part of a very different future.
You can download a copy of this report from our publications page.
Follow this link to download this important new report: From the Ashes of the Crash