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British reform would ease rules for CUs
MANCHESTER, Eng. (8/5/08)--The Association of British Credit Unions Ltd. (ABCUL) says that government proposals to loosen rules and allow credit unions and other not-for-profit organizations to compete more evenly with private sector firms could lead to significant credit union growth. ABCUL CEO Mark Lyonette told Crains Manchester Business (Aug. 4) that he was delighted with the news that credit union rules would be modified, especially with a relaxation of the common bond. His comments were in response to consultation documents issued by HM Treasury on plans for a legislative reform order to amend the rules of credit unions and industrial and provident societies. It would replace "common bond" with a less restrict "field of membership" test; would open the door to lend money to businesses, partnerships and voluntary organizations; and scrap a 20,000-pound current lending and savings cap. Credit unions and others had expressed concern that the rules were out of date and restrictive on their development and competitiveness, the newspaper said. In the United Kingdom, just over 1% of the population has a credit union account. That compares with 40% in the U.S. and Canada and 25% in Australia. The consultation document notes that credit unions are perceived as a "poor persons bank" and suggests credit unions need to target more affluent members to remain viable. One credit union, Oldham CU, said the reform would be the first step toward greater cooperation between credit unions, especially on back office systems.


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