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The Association of British Credit Unions Ltd (ABCUL) has welcomed
recommendations in a report by the Treasury Select Committee which it is hoped
will strengthen the credit union movement and bring affordable credit and safe
savings to more consumers.
The report acknowledges that credit unions have a vital role to play in
increasing access to affordable credit, providing opportunities to save and
promoting financial inclusion.
It also welcomes the increasing professionalism of the sector and calls on
credit unions and Government to do more to improve the financial co-operatives
ability to grow and attract capital.
The committee is calling for support to enable lending practices and IT
infrastructure to be improved, an extension to Community Investment Tax Relief
for credit unions seeking subordinated capital and new legislation in the
current session of parliament to replace the 27 year old Credit Unions Act.
All this has been welcomed by ABCUL CEO Mark Lyonette.
He explained: “The hundreds of credit unions up and down the country who are
working hard to provide inclusive financial services in their communities and
workplaces will be delighted with the Committee’s comments about their valuable
role.
"I am especially pleased with the Committee’s assertion that savings are
integral in any effective strategy for financial inclusion; a premise that the
credit union movement is based upon, and something that is especially important
in light of the recent collapse of Farepak.
“I’m pleased that the Committee has recognised the limitations of the current
legislation governing how credit unions operate.
"We are looking forward to working with HM Treasury on a consultation on the
legislation announced last week by Economic Secretary to the Treasury, Ed Balls.
“Credit unions’ ability to attract the capital they need to grow and provide
more services to more people would be greatly enhanced by the ability to attract
investment from outside organisations which will attract Community Investment
Tax Relief.
"Enabling credit unions to take deposits from organisations in their communities
will also improve the growth and strength of credit unions, especially in their
early years.
“Credit unions around the country are working hard to make the Growth Fund a
success, and are making more loans available to many people who would otherwise
face extortionate interest charges from doorstep lenders.
"Extra support for IT infrastructure and improving lending practices,
recommended by the committee, will greatly enhance their ability to make a
success of the extra funding.
“Credit unions play a vital role in many communities, providing affordable
credit and safe savings for over half a million people, a figure which has more
than doubled in the past four years.
"I’m delighted that this has been recognised by the report which also contains
some excellent recommendations for how the sector can grow and strengthen.”
Source:
Getting Paid
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