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Home > Prudential Regulation Authority > Reform of the legacy Credit Unions sourcebook – PS4/16

Reform of the legacy Credit Unions sourcebook – PS4/16

01 February 2016

​​This policy statement (PS) provides feedback by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to responses to PRA Consultation Paper (CP) 22/15 and FCA CP15/21, ‘Reform of the legacy Credit Unions sourcebook’, published jointly in June 2015.

The PS also contains PRA final rules and a supervisory statement intended to be read in conjunction with the rule instrument, and FCA final rules and guidance.

The PS also contains the FCA changes to the FCA Credit Unions Sourcebook (CREDS) as a result of the December 2014 consultation by the FCA on forms, transitional and consequential aspects of the new accountability framework for individuals working in banks, building societies, and credit unions (CP14/31). 


In CP22/15 the PRA proposed to delete CREDS in its entirety and to replace it with a new Credit Unions Part in the PRA Rulebook dealing exclusively with matters affecting the financial safety and soundness of credit unions.  This PS sets out final rules intended to replace all PRA-designated rules in the legacy sourcebook, ‘CREDS’ and includes amendments to rules concerning general organisational requirements and whistleblowing.

This policy statement is relevant to all UK credit unions, credit union trade bodies and third parties that interact with the credit union sector.

Proposals addressed by PS4/16
In light of feedback received to CP22/15 and CP15/21, some of the proposals have been revised including:

  • limit on shares and deposits;
  • framework for additional activities capital requirement and calculation of ratios relevant to business model;
  • larger credit unions member numbers and capital requirements; and
  • lending cap. 

The changes following PRA and FCA CP22/15 and CP15/21 will come into force on 3 February 2016 with the exception of PRA rules on whistleblowing (Credit Unions 12), which come into force 7 September 2016 - see Credit Unions 18 for transitional rules for the period 7 March - 6 September 2016. The changes following FCA CP14/31 will enter into force on 7 March 2016 (in line with the other provisions related to the accountability regime).

Summary of content

The appendices to the PS set out:

  • Rule changes including:
        a. the Credit Union Rulebook Part of the PRA Rulebook
        b. amendments to the Glossary of the PRA Rulebook
        c. amendments to the Depositor Protection Part of the PRA Rulebook
  • Supervisory Statement SS2/16 - The prudential regulation of credit unions

Policy Statement
Reform of the legacy Credit Unions sourcebook – PS4/16
The prudential regulation of credit unions - SS2/16
PRA Credit Union Rulebook Part
Handbook (Credit Unions) Consequentials Instrument 2016 
FCA Board instrument