Treasury select committee member Andy Love says the Government’s new less onerous regulations for credit unions and co-operatives are welcome but do not meet its promise to promote mutuals.
Last week, the Treasury announced that from January 8, 2012, rules on taking on new members, charging interest on deposits and mergers and takeovers will be relaxed for mutuals. They will also be able to choose their own accounting year-ends and will not be required to internally audit interim accounts. The flexibility over accounting year-ends already applies to plc firms.
The May 2010 coalition agreement says the Government will “foster diversity and promote mutuals”. The Treasury says the move is an important part of that commitment.
Labour and Co-operative MP Love says: “We are 18 months into this Government, so it has taken an inordinately long time for this to trundle through. It does not show the urgency we would expect, considering the coalition’s commitment to promote mutuals.”
Association of British Credit Unions chief executive Mark Lyonette says: “We are delighted that reforms have been agreed. They free up the sector to compete on a more level playing field.”
Love says the Government should go further than creating a “more level” playing field. He says: “I would urge the Government to continue opening up the marketplace for credit unions in order that they can provide real competition to building societies, banks and other financial institutions.”