Co-op Party Live – Policy: A Community ReInvestment Act

In January, Labour & Co-operative MP Gareth Thomas introduced a 10 Minute Rule Bill on a Banks (Financial Exclusion and Access to Finance) Bill to parliament. The introduction of the new Bill – often called a British Community Reinvestment Act – would establish a requirement for major financial institutions to work with purpose-driven financial institutions, such as credit unions and community development finance institutions (CDFIs), to expand lending to people who are financially excluded.

Financial exclusion is a major problem in the UK, leaving many people unable to save and invest, exposing them to financial insecurity, lowering living standards and often entrenching poverty. Expanding lending to these underserved people and communities could enable people to begin saving, invest for the future or provide for their families. It would considerably reduce the number of people dealing with loan sharks and other illegal lenders.

In addition, a new British Community Reinvestment Act would increase lending to small businesses and co-operatives, which are often underserved by high street banks. Ensuring effective lending on fair terms to these SMEs and co-operative could kickstart economic growth and help to growth job opportunities across the country.