Ed Balls, the economic secretary to the Treasury, has highlighted how credit unions are now able to offer larger loans over longer periods.
Speaking at the Building Societies Association’s (BSA’s) annual lunch, Mr Balls highlighted the way the Treasury has given credit unions “greater borrowing powers” over the last year.
Furthermore, lenders have been able to “offer higher-risk loans” to people and communities that may have had to seek products via illegal means, he stated.
This has been achieved due to the Treasury’s move to double the credit union interest rate ceiling, Mr Balls suggests.
During the speech, Mr Balls also suggested that “building societies are leading the sector in responsible lending and product innovation”.
“This is an industry that is vital to the British economy and vital to the daily wellbeing of literally millions of people,” he remarked.
Interest rate rises, announced by the Bank of England’s monetary policy committee this week, could impact on individuals who have variable and discounted home loans.
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