PROPOSALS by the financial regulator to strengthen the credit union sector and protect its members have been welcomed by a Liverpool credit union.
Lodge Lane & District Credit Union project manager Marie Gray described the proposals as “fair and proportionate”.
Credit unions are seen as an alternative to high street banks for people unable to open conventional bank accounts or borrow money from the big banking groups.
The Lodge Lane credit union was involved in the Financial Services Authority’s (FSA) original consultation process.
Among suggestions in the FSA’s “near final rules” were moves to ensure new credit unions had enough capital.
Smaller credit unions would have to secure initial capital of at least £10,000, while larger credit unions would need at least £50,000.
The watchdog also proposed a liquid assets level of at least 5% of liabilities for all credit unions, but not below 10% in two consecutive quarters.
And it has called for annual financial returns to be filed within six months instead of the current seven.
Any changes would be phased in by September 2013 to give credit unions enough time to comply.
