Credit Unions

Lord Kennedy of Southwark Excerpts

Tuesday 3rd February 2015 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government when they plan further reform of the law regarding Credit Unions.

[Lord Kennedy of Southwark (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as director of London Mutual Credit Union.

[Lord Newby (LD)]

My Lords, on 31 December 2014 the Government published a response to the call for evidence on credit unions. In this response, the Government committed to consider, in the next Parliament, potential changes to credit union legislation.

[Lord Kennedy of Southwark]

My Lords, it is important for credit unions to be able to grow on a solid base to deliver for their members. Whichever party or parties are in government after the general election, would the noble Lord agree that two of the most important areas for reform are reform of the 2 million cap on potential members—maybe change that to actual members—and removal of the legal barriers to enable credit unions to give other financial products to their members?

[Lord Newby]

Yes, I agree with the noble Lord that those are both important issues. In the response to the call for evidence, the Government have committed to considering changes to the common bond legislation. The noble Lord will be aware that credit unions maintain their exemption from the consumer credit directive only if they have a restricted potential market. It is important that we do not expand the definition of the common bond in ways that could jeopardise that exemption.