Law changes to enable VCS to join credit unions

VCS groups will be able to join a credit union from 8 January under changes made to the Credit Unions Act 1979. Previously, only individuals were able to be members of credit unions and use the financial services they provide. However, last November, a Legislative Reform Order was passed by Parliament, under the Credit Unions Act 1979, meaning that credit unions will be able to:

• Reach out to more people by extending membership to new groups
• Provide services to the VCS, social enterprises and businesses, not just individuals
• Choose to pay interest on savings, instead of a dividend.

As financial co-operatives, owned and controlled by their members, credit unions have no outside shareholders to pay and any profit they make stays in the community and is used to develop the credit union and provide a return to savers.