Treasury Officials Detail Major Legal Changes for Building Societies
Top Treasury officials have outlined significant legal changes that will impact customers of Nationwide Building Society and other building societies across the United Kingdom. These developments follow a request from Members of Parliament for an update on government efforts to expand the mutuals sector nationwide.
Multi-Year Programme for Mutuals Sector Expansion
Gwyneth Nurse, director general of financial services at the Treasury, informed the Treasury Committee that the government is engaged in a comprehensive, multi-year programme across the mutuals sector. She referenced Chancellor Rachel Reeves' first Mansion House speech in 2024, where a series of reforms were unveiled to unlock the full potential of mutual and co-operative businesses.
One of the key changes proposed involves reforming regulations governing building societies like Nationwide. Existing legislation was revised in 2024 to ease funding limits imposed on these institutions by offering specific exemptions. The amendment allows the Treasury to introduce further regulation through statutory instruments to define which types of funding would be exempt from these limits.
Statutory Instruments to Be Laid Before Summer Recess
Ms. Nurse provided a crucial update to the committee, stating that while progress on the statutory instruments needed to change funding limits for building societies has been delayed, the government plans to lay these instruments before the summer recess. Parliament's summer recess is scheduled to begin on July 16.
"We have some resource that has come in to help us do that," she added, indicating renewed focus on this regulatory work. The government has previously stated its ambition to double the size of the mutual and co-operative sector, prompting questions about whether this would involve expanding smaller providers or creating more large entities like Nationwide.
Challenges in Creating More Large Mutuals
When asked about the feasibility of creating "lots more Nationwides," Ms. Nurse responded that it would be challenging, noting there is no single answer and it depends on which part of the financial services sector is being considered. Nationwide currently boasts millions of members and over 600 branches, with a recent commitment to keep all high street branches open until at least the beginning of 2030.
Regulatory Reports and Sector Coordination
In her 2024 Mansion House speech, Chancellor Reeves also requested that the Financial Conduct Authority and Prudential Regulation Authority compile a report on the mutuals sector. Ms. Nurse confirmed that this report was delivered in December, with regulators committing to further examination of credit union regulation specifically.
The report contains numerous recommendations that Treasury officials will review in collaboration with regulatory bodies. Additionally, Nationwide has collaborated with other large mutuals to establish the Mutual and Co-operative Business Council, which aims to better coordinate the sector through work with related trade associations.
Ms. Nurse expressed satisfaction with the council's progress, noting it has produced three reports on growth in various aspects of the sector, containing recommendations that Treasury will examine closely in collaboration with involved parties.
Nationwide Customer Bonus Opportunity
Separately, Nationwide customers may be eligible for a £175 payment if they transfer their current account from a non-Nationwide provider to a new or existing FlexDirect, FlexAccount, or FlexPlus account. To qualify, customers must complete a full switch using the Current Account Switch Service, which includes closing their previous account.
Additional requirements include depositing at least £1,000 and making one debit card transaction within 31 days of either opening a new account or requesting a switch into an existing account. Once all conditions are met, the £175 will be deposited into the switched account within 10 days, appearing on statements as 'Switching Offer.' For joint accounts, only one payment is provided per switch.
