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On 2 July, over 300,000 savers and borrowers will feel the benefit of proper consumer protection when the credit unions they own and use come under the control of the Financial Services Authority.


A higher profile regulatory regime will bring increased credibility to the sector and enable members to benefit from new services and improved protection.


For the first time, money saved in credit unions will be protected on the same terms as money held in banks and building societies. Credit unions will be able to offer more services to their members, including more varied savings schemes and joint accounts.


Shaun Spiers, CEO of credit union trade association ABCUL said


"An improved, proportionate regulatory regime and relaxed legislation has been a major goal of the
credit union movement for many years. Now that these building blocks are in place, we can concentrate on increasing access to the valuable services that credit unions provide.


"Credit union membership in England, Scotland and Wales is pitifully low compared to other English speaking countries, and many of the other 180 countries around the world where credit unions exist. The movement has realised over the past few years that in order to build a successful credit union movement, where many more people can be served and helped, credit unions need to secure sufficient human and financial resources to establish themselves as sustainable, economically viable social businesses. When credit unions are operating on a secure financial footing, they can be fully inclusive providers of financial services to all sections of society."

ENDS


For more information or case studies, please contact Abbie Shelton

0161 819 6994/07786 384 348

Notes for Editors


What is different?

Authorised deposit-takers

On 2nd July 2002 credit unions will officially become authorised deposit-takers with a permission under
Part IV of the Financial Services and Markets Act 2000 to accept deposits from members of the public.

Safe savings

On this date, credit unions will also become members of the Financial Services Compensation Scheme. For the first time, the savings of a credit union member will have the same level of protection as if they had been deposited with a bank or a building society. For all deposit takers, the first £2,000 of savings will receive 100% cover; the next £33,000 of savings will receive 90% cover.

Complaints Ombudsman

1st July 2002 also sees credit unions become part of the Financial Ombudsman Service. If a member has a complaint against a credit union, once they have exhausted the credit unions internal complaints procedure, the complaint can be taken to an external arbitrator – the Financial Ombudsman Service.

New services for members

CRED replaces some of the legislative limits on credit unions (such as increasing the maximum amount of a loan for credit unions with more than 5% capital). It is also anticipated that a range of new legislative powers will be introduced at the same time. An important one for members is the option for a credit union to offer a range of savings accounts paying different dividends depending on the term of the savings account.


The Size of the Credit Union Market in Britain


Data for 30th September 2000 is available on 658 credit unions in England, Scotland and Wales.
2000* Number of Credit Unions Number of Credit Union Members Total Assets (£000s)

ABCUL 465 259,627 180,122
Other 193 65,667 34,874
Total 658 325,294 214,996

ABCUL %age 70% 80% 84%
(Based Annual Return Data from September 2000)

Further Contacts

Financial Services Authority – http://www.fsa.gov.uk – 020 7676 1000

Financial Services Compensation Scheme – http://www.fscs.org.uk 020 7892 7300

Financial Ombudsman Service – http://www.financial-ombudsman.org.uk 020 7964 1000





This press release was distributed by ResponseSource Press Release Wire on behalf of ABCUL in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit https://pressreleasewire.responsesource.com/about.