Financial Conduct Authority Chair Touts Need for Sustainable Community Based Finance

On January 17, 2020, Financial Conduct Authority (FCA) Chair, Charles Randell, delivered a speech at the National Credit Union Forum in Penrith. Entitled, “Is this the decade of the credit union?”, Randell, a member of his local credit union in South London, encouraged the room to “be the leaders and advocates for growing and well-governed community based lending and saving.” Randell emphasized the need for community based financing, the responsibility of regulators to support their growth through regulation, and the obligation of credit unions to change to meet growth and expansion.

Highlights of his speech included:

  • “Community based lending as a key part of growing the supply of affordable credit.
  • Acceleration of growth in credit union membership requires a transformation of the sector.
  • Credit unions need governance that’s equal to this transformation challenge, while continuing to protect consumers and prevent financial crime.”

Notably, Randell articulated the visible growth of credit unions within the last decade, showing positive changes to increase available services, however, this growth may require credit unions to “offer a broader range of products and services.” He further suggested that, “Treasury should consider if there is value in a review of credit union and society legislation” and “…any provisions that would enable credit unions to grow or provide new products and services would need to be accompanied by an appropriate and robust regulatory regime.” However, Randell, placed the responsibility of growth on credit unions, as well, by imploring them to invest in technology in order to improve risk management skills and technology systems to reach new members and provide new products and services.

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