The Co-operative and Community Benefit Societies and Credit Unions Bill proposed by Labour's Lord Tomlinson is said to represent the "re-branding" of societies necessary at a time when the sector is undergoing a "renaissance".
Lord Tomlinson told the Lords: "We are at the end of a period where there has been a decline in the significance of co-operation and we are now in the era of a resurgence, a renaissance, of co-operation and of mutuality."
The Bill aims to help mutuals flourish by introducing requirements which would ensure they could be supervised by the Financial Services Authority.
Under the proposals, laws on credit unions will also be brought into line with those for building societies.
Liberal Democrat spokesman Lord Newby backed the "eminently sensible" Bill, which has already cleared the Commons, as a "tidying-up and modernising measure".
He praised the "timely and good Bill" for focusing on objectives of modernising legislation and increasing confidence in societies.
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