Reform of credit union laws has been unveiled in a bid to tackle financial exclusion. Economic secretary, Kitty Ussher, said the mutual sector had a vital role in helping people most at risk of social exclusion. She pledged to relax membership qualifications for credit unions – usually referred to as the common bond, and to allow electronic communication between co-operatives and their members and other stakeholders. Credit unions are restricted by law to a particular locality or occupation. A housing association could not affiliate with a single credit union if its properties cover several geographic sites. Local authorities are battling loan sharks who target people on low incomes in the run-up to Christmas. The extent of reliance on savings clubs was revealed by the collapse of Farepak last year, which left thousands out of pocket. Ms Ussher said: ‘I want the sector to thrive, to be widely seen as a genuine alternative to proprietary companies across the country, not stereotyped as "old fashioned" or confined to its Northern roots. This is a vision of credit unions as the modern-day equivalent of 18th century "town banks", providing a local, trusted, alternative to the national banks on every high street.'
