Economy Minister Dr Caoimhe Archibald has announced plans to bring forward legislation to modernise Northern Ireland’s credit union sector, publishing a roadmap that commits to passing a Bill before the next Assembly elections in 2027. The move follows a 12-week public consultation that ended last July and aims to overhaul legal frameworks that have remained largely unchanged for four decades.
The ‘Credit Union (Modernisation and Reform) Next Steps’ document, released today, sets out proposals to expand lending powers, enable digital transformation, and establish a permanent advisory group to oversee further reforms. With nearly 600,000 members across the region, credit unions represent a significant portion of the financial services landscape, yet currently operate under the 1985 Credit Unions Order that restricts their activities compared to counterparts in Great Britain and the Republic of Ireland.
Legislative Timeline and the Road to 2027
The Department for the Economy faces a tight deadline. Subject to Executive approval, the Bill will be introduced to the Assembly with the explicit aim of becoming law before the current mandate ends in early 2027. Assembly elections are scheduled for May 2027, giving legislators a narrow window to scrutinise and pass the proposed reforms.
Key elements of the implementation plan include:
- Primary legislation through the Credit Union (Modernisation and Reform) Bill
- Secondary legislation to deliver further reforms incrementally
- Establishment of a permanent Credit Union Advisory Group comprising sector representatives and subject matter experts
- Co-design approach continuing with the Irish League of Credit Unions (ILCU) and the Ulster Federation of Credit Unions (UFCU)
The consultation, which ran from 17 April 2025 to 10 July 2025, sought views on modernising the legal framework, achieving digital transformation, and creating new lending opportunities for sustainable and community-focused projects.
Minister and Sector Leaders Welcome Progress
Dr Archibald emphasised the community role of credit unions while acknowledging the need for evolution. She said:
“Credit unions provide a vital financial service for their members. They foster a spirit of cooperation and mutual support and are at the heart of many local communities. As we look to the future, it is essential that credit unions continue to evolve in response to changing member needs and community expectations.
“Following public consultation, these proposed next steps will modernise the credit union legislative and policy framework and expand the role that credit unions play within the economy.”
Martin Fisher, representing the Irish League of Credit Unions, welcomed the publication. He said:
“The Irish League of Credit Unions welcome the publication of the ‘Next Steps’ paper and the continued commitment to strengthening and modernising the credit union movement in Northern Ireland. Credit unions play a vital role in communities across the island, and this marks an important step towards ensuring the legislative and regulatory framework within the North supports sustainable growth, innovation, and greater financial inclusion. We look forward to continuing to work closely with the Minister and officials as the proposals are progressed.”
William McKeown of the Ulster Federation of Credit Unions added:
“The UFCU welcomes and supports the efforts being made to modernise Credit Union legislation in Northern Ireland. The sector plays an important and developing role in supporting the lives of many financially right across the community.”
The Reform Agenda: What Could Change
While today’s announcement confirms the legislative vehicle, the detailed policy changes remain to be fully articulated in the Bill itself. However, the consultation document previously signalled several significant shifts from the 1985 Order:
- Expanded lending powers: Potential to lend to businesses, charities, and community groups beyond current personal lending restrictions
- New financial products: Possibility of current accounts, mortgages, and insurance products
- Digital modernisation: Framework to support online banking platforms and enhanced cybersecurity
- Inter-credit union lending: Allowing credit unions to lend to each other, improving liquidity management
- Flexible common bonds: Relaxing membership eligibility rules to allow broader community access
The Minister’s commitment to secondary legislation suggests some reforms may be phased in after the primary Bill passes, allowing the sector to adapt gradually.
Funding and Practical Challenges Remain Unclear
Notably absent from today’s announcement are specific funding commitments for the digital transformation the sector requires. Research context indicates a stark disparity: while credit unions in Great Britain have received nearly £200 million in government support through the Dormant Assets Fund and devolved administrations for digital platforms, Northern Irish credit unions have received less than £140,000 for accessibility and digital improvements.
The ILCU has previously highlighted that credit unions here operate with £1.87 billion in assets and hold £1.61 billion in savings, yet lack the legal capacity to offer the range of services available to credit unions elsewhere on these islands. The organisation has called for specific rates exemptions similar to those enjoyed by post offices and rural ATMs, though no such commitments appear in today’s publication.
Additionally, the proposal to increase corporate lending caps—from the current 10% of portfolios potentially up to 25%—raises questions about risk management. Niamh Goggin of Small Change, speaking at a consultation event earlier this year, cautioned that larger loans mean higher default risks and highlighted the failures of credit unions during the Celtic Tiger boom in the Republic of Ireland.
Questions for Stakeholders
As the Bill moves toward Assembly scrutiny, several questions remain:
- Will the Executive prioritise this legislation amid competing demands, given the narrow window before the May 2027 elections?
- How will the Department address the significant funding gap for digital infrastructure that leaves Northern Irish credit unions at a competitive disadvantage compared to their Great Britain counterparts?
- What safeguards will be embedded in the legislation to prevent over-extension of credit union balance sheets as lending limits expand?
- How will the permanent Advisory Group balance sector expertise with independent oversight to protect member interests?
- Will the reforms include specific provisions for face-to-face services in rural areas, given concerns that digital-first strategies could exclude older people and those in digital poverty?
What Happens Next
The Department will now seek Executive approval to introduce the Bill. If granted, the legislation will proceed through the Assembly’s standard stages: First Stage, Second Stage, Committee Stage, Further Consideration Stage, and Final Stage, before requiring Royal Assent.
The consultation analysis and next steps document is available on the Department for the Economy website. Credit union members and community groups can monitor progress through the Department’s social media channels and the Assembly’s legislation tracker.
With nearly one in three Northern Irish residents holding credit union membership, the outcome of this legislative process will affect communities from Coalisland to Belfast. Whether the reforms can deliver the promised modernisation while preserving the sector’s community ethos—and whether they can be delivered before the political clock runs out—remains to be seen.