Legislation is needed to encourage the growth of credit unions, says Dr Nicholas Ryder
Access to the consumer credit market in Great Britain has dramatically altered over the last 30 years. Providers of credit now allow consumers to access credit over the internet and through their interactive televisions. Such innovations have brought greater convenience to millions of consumers. There is, however, a dark side to the consumer credit market, fuelled by convenient access to credit, eg record levels of consumer debt, an increase in irresponsible lending practices, ineffective legislative protection of consumers and financial exclusion.
Financial exclusion refers to a person’s inability to access essential and basic financial services in an appropriate form. It is said that 7.9 million people are financially excluded in Britain. The problems associated with the consumer credit market were largely ignored by Conservative governments. New Labour, however, has initiated several policies aimed at tackling financial exclusion. Of particular relevance was the report published in 1999 by Policy Action Team 14 entitled Access to Financial Services. It recommended that credit
