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<p>In 2014, the Government undertook a call for evidence to understand the appropriate
steps that could be taken to support the credit union sector. Subsequently, the maximum
interest a credit union can charge on loans was raised from 2% to 3% per month, and
the upper limit on the geographical common bond was raised from 2 to 3 million people.</p><p>The
Government continues to be open to considering the case for further reform. ABCUL,
the sector’s largest trade body, is currently carrying out a sector-wide consultation
which is due to conclude later this year. HMT will consider its conclusions in the
development of future credit union policy.</p><p> </p><p>At Autumn Budget 2018, the
Government announced a package of measures to support credit unions, and other social
and community lenders, including:</p><ul><li>A £2 million affordable credit challenge
fund, harnessing the UK’s FinTech sector to address challenges faced by social and
community lenders, including credit unions.</li><li>A change in the regulatory boundary
of credit broking to make it easier for registered social landlords such as housing
associations to refer their tenants to social and community lenders.</li><li>A prize-linked
savings pilot scheme, to encourage the growth of the credit union sector and encourage
consumers to build up their personal savings. This pilot launched on October 17<sup>th</sup>,
International Credit Union Day, in 13 credit unions around the country, with 2 more
credit unions due to join the pilot.</li><li>A feasibility study to design a pilot
for a UK No-Interest Loans Scheme.</li></ul><p> </p><p>The PRA have also proposed
a simplified, proportional capital requirement regime for credit unions in their recently
published consultation.</p>
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