Mike Kane – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Mike Kane on 2014-04-29.

To ask Mr Chancellor of the Exchequer, what support the Government is giving to credit unions to help extend access to fair credit.

Andrea Leadsom

The Government is supportive of credit unions and has taken a number of steps to assist them, most recently including:

• The Department for Work and Pensions investment of up to £38 million in an expansion project for credit unions. The project aims to help credit unions expand and grow, enabling them to provide financial services to more people.
• From 1 April this year the Government increased the cap on the maximum interest rate a credit union can charge for loans from 2% to 3% per month. This will allow credit unions to make more loans to their members without making a loss. Even if they choose to charge the higher rate of interest the cost of borrowing from a credit union will still be significantly cheaper than many high cost lenders.

The Government intends that these measures will help the credit union sector go from strength to strength, so it can be a viable option for financial services provision for an even wider range of consumers.