HM Treasury sets out planned credit union common bond reforms including raising the locality potential membership cap to 10 million

HM Treasury has published its response to the call for evidence on reforming the credit union common bond requirement in Great Britain and set out a package of legislative changes it intends to take forward to widen membership eligibility while retaining the common bond model. The planned reforms include increasing the locality common bond potential membership cap from 3 million to 10 million, permitting students to join locality-based credit unions, modernising family referral rules, and treating certain retirees as fully qualifying members. The call for evidence drew 15 responses from trade bodies, credit unions and other stakeholders, with broad support for keeping common bonds but updating aspects seen as barriers to sustainable growth and transfers of engagement. In response, HM Treasury plans to amend legislation so relatives can be admitted regardless of whether they live in the same household as the qualifying member, while also allowing individuals who live in the same household as the qualifying member; and to allow members of occupation and employer bonds to remain fully qualifying on retirement and enable retirees to join after retirement, with similar changes for locality bonds where eligibility is based on employment in the locality. It decided not to pursue suggested safeguards aimed at limiting very broad occupation or employer bonds and will not delegate employer changes within an employer bond to credit union boards, citing the need to avoid unnecessary barriers and to protect members’ democratic control. The government will take forward the legislative reforms when parliamentary time allows. It will continue work with the Financial Conduct Authority and Prudential Regulation Authority on clearer and more effective regulation for credit unions, alongside ongoing wider mutuals work referenced in the response.