Tuesday 1st July 2008
The government has stressed the importance of providing access to affordable lending to families impacted upon by the credit crunch.
Under new plans recently revealed by Kitty Ussher, economic secretary to the Treasury, more is to be done to ensure credit unions are accessible to those who need them.
Proposals put forward by the government include the establishment of a Legislative Reform Order to change the conditions under which credit unions operate.
As part of the reforms, credit unions may soon be able to admit groups, rather than individuals, as members.
They could also be permitted to charge for services such as chequebooks at a rate more in line with the rest of the financial services market.
Ms Ussher says: "We want to make it easier for families to access the affordable credit on their doorstep that is offered by credit unions, rather than having to turn to more expensive schemes or, at the extreme end, illegal loan sharks."
"Cooperatives and credit unions make a significant contribution to our economy and to our society," she adds.
However, the economic secretary notes the need to bring such establishments into the 21st century through legislation reform.
Research from UK payments association Apacs indicates that consumers are increasingly looking to debit cards when spending using plastic, while credit cards now account for less than two-fifths (38 per cent) of such expenditure.
Sandra Quinn, director of communications at the organisation, notes that debit cards are also increasingly popular for internet-based purchases.
But she advises that using a debit card may not be recommended for such transactions, due to the additional protection that is typically provided if a credit card is used instead.
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