The laws governing credit unions are set to be updated - less than a year after island’s first such organisation opened its doors.

Last week, the House of Keys approved the principle of the Credit Unions (Amendment) Bill. It brings regulatory powers under the umbrella of the 2008 Financial Services Act.

Treasury department member Bill Shimmins (Middle) said: ’Bringing credit unions into the Financial Services Authority’s existing regulatory framework will approve the FSA’s enforcement and regulatory powers over credit unions to a level consistent with those it has for other regulated activities.’

Social benefits would outweigh any cost of implementing legislation, he said.

The Manx Credit Union officially opened the doors to its Douglas base in January.

Mr Shimmins conceded the costs of amending the law might be considered ’disproportionate’ for one credit union, but the FSA believed it was ’essential in order to adequately protect the members of that credit union, any future credit unions and the island’s reputation’.

The bill also transfers provisions from legislation dating back to 1892, to be incorporated into the 1993 Credit Unions Act.

’This means that the amended act will address credit unions and corporation matters in a similar way as company law does for companies, he said.

It will also enable ’but does not mandate’ the establishment of a credit union savings compensation scheme to be established under the 2008 act.

’Finally, the bill updates the remaining sections of the act so that it will provide constitutional and governance legislation for credit unions that is both effective and modern,’ he said.

The bill will face detailed scrutiny at the clauses stage, at a later date.