In the United Kingdom credit unions are regulated by the Financial Services Authority, or FSA. UK credit unions are classified under two types: type 1 are the smaller CUs while type 2 are larger. From November 2006 many type 2 CUs began offering their members debit card accounts which enabled CU members to obtain funds from any Link ATM. UK credit unions do not offer cheques as these are generally being phased out in UK financial transactions.
Credit unions in the UK now offer a wide range of services to their members; from direct debits to payroll deductions, from being able to send standing orders from their accounts to paying members bills to providing cheaper insurance facilities.
In the U.K. one of the benefits of joining a credit union is the life insurance CU's provide their members free of charge. Also, if a member were to die then their loan value is wiped out with no further charge to the member's account or their family; further, in many cases their savings with the CU are doubled and passed to the next of kin. As recent history has shown, with the Christmas savings club Farepak going bust and hundreds of customers losing all their savings, the CU is a real alternative for providing good savings rates and affordable loans, knowing that customers are protected if the worst happens.
Currently there is a government financial initiative mainly being operated by credit unions to bring financial services to the economically disadvantaged members of society. One aim is to significantly reduce the influence of door step lenders where a £300 loan over 30 weeks may involve paying back around £450; a credit union loan would typically require paying back around £325.