The Treasury is asking Parliament to approve an order that would allow credit unions to offer new services.
The credit union legislative reform order, which the Government has been consulting on since 2008, would enable credit unions to provide services to community groups, social enterprises and companies, and would reform the ‘common bond' that governs membership to allow unions to recruit more members.
They would also be able to offer a fixed rate of interest, instead of a dividend, on members' savings.
Abcul, the umbrella body for credit unions, said it expected the order to become law this summer.
"This has been eagerly anticipated by the credit union sector for a long time and it's good to know that we're nearly there," said Mark Lyonette, chief executive of Abcul.
"All the political parties are supportive of the proposals, and this means we are likely to see the changes come into effect by 1 August this year – which is really exciting for credit unions."