Credit Union Legislative Frameworks in the United States of America and the United Kingdom - A Flexible Friend or a Step Towards the Dark Side?

This article questions the findings of several studies which have concluded that the Credit Unions Act 1979 was a factor limiting the growth of credit unions in the United Kingdom (UK). The author's conclusions are based upon an analysis of the amendments to the Credit Unions Act 1979 introduced by the Financial Services Authority (FSA). As a result, the 1979 Act now reciprocates the controversial, yet flexible United States (US) legislative framework. In particular, the article examines the interpretation of the common bond, the provision of financial services and the regulation of credit unions. The article concludes that these three statutory provisions have assisted the growth of credit unions in both countries and not limited their development. However, the growth of credit unions has come, at the expense of their unique status and philosophy. It has made US credit unions, in particular, indistinguishable from banks. This is a problem which may affect credit unions in the UK. The article concludes that the Credit Unions Act 1979 did not limit their development, but acted as a galvanising factor for credit union expansion.