Children will be permitted to save with credit unions - but not borrow from them - under proposed new laws.

The Credit Unions (Amendment) Bill passed its second reading and clauses stages in the Legislative Council last week.

It was only in 2016 that the island’s first credit union, the Manx Credit Union, opened its Douglas headquarters.

Bill Henderson MLC, who is guiding the bill through the upper chamber, said: ’Apart from regulatory matters, key aspects of the bill are to permit children and corporate bodies to save with, but not to borrow from, a credit union.

’As at present, adult individuals may both save with and borrow from a credit union within specified limits.’

The bill will also allow a credit union to issue ’deferred’ shares in addition to ’ordinary shares’, subject to certain constraints, and enable the Treasury to establish a dedicated savings compensation scheme, should it determine to do so.

It will also give the Financial Services Authority the ability to amend savings and loan limits, with Tynwald approval.

The bill brings credit unions under the FSA’s regulatory regime.

Mr Henderson said: ’Bringing credit unions into the FSA’s existing regulatory framework will improve the FSA’s enforcement and regulatory powers over credit unions to a level consistent with those it has for other regulated activities.

’The island’s first credit union was authorised in 2016. Although the costs of the amending legislation may be considered disproportionate for a sole credit union, the FSA believes this bill is essential in order to adequately protect the members of that credit union, any future credit unions and the island’s reputation.’

The bill is back before the Legislative Council for a third reading today (Tuesday). Due to minor amendments that have been made, if successful, it will need to return to House of Keys for consideration.