These savings and loan co-operatives date back to 1960 in Derry and 1964 in Wimbledon. The first legislation, in 1979, was the dying act of the Labour government, drawing on the supportive recommendations of the National Consumer Council. The UK government since then has taken successive steps to upscale credit unions, including some relaxation of the requirements on members sharing a common bond and an increase in the cap on interest rates they can charge.

Last year, the government signed a contract with Abcul, the leading credit union association, worth up to £38m and as noted in the previous blog, Unity Trust bank is operating a modest credit union development fund. In the devolved setting, the Welsh administration and Scottish government have also promoted credit unions. But, is it credible that credit unions are seen both as alternatives to predatory lenders, by Justin Welby, the Archbishop of Canterbury among others, and yet also as potential challengers to the dominance by the high street banking behemoths of current account banking? To mount such a twin challenge, they would need a massive investment in back-office capacity – unless they could pool resources to buy agency services, perhaps from another established socially oriented bank. Growth for mutuals works best when it is targeted with care on new members and new needs.

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