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Credit unions

Updates Rules and legislation |  Depositor protection Financial returns |  Other forms | Statistics | Authorisation and registration | Resources | Pre 2016 updates

The Prudential Regulation Authority (PRA) regulates approximately 500 credit unions in the United Kingdom. This section contains useful information including the rules and legislation for credit unions. Please use the links at the top of this page to access the relevant information. For the latest updates for credit unions, see below.

Readers may also find it useful to refer to 'The PRA's approach to banking supervision' for the details on how the PRA supervises credit unions (available under Related Links).

Latest updates 

August 2017

In August 2017, the PRA emailed Category 5 credit unions with the findings of the 2017 assessment. Credit unions received one of three letters, depending on which peer group they fell into. The PRA also emailed Category 4 credit unions with a letter setting out themes seen across that population. All four letters are available in Resources.

March 2017

On Friday 10 March, the PRA published a document outlining reporting clarifications following feedback received on the Bank of England's Electronic Data Submission (BEEDS) portal. The document covers three main areas: i) validation and plausibility; ii) completing the return itself; and iii) who to contact with queries. Nothing in the document represents a change in policy from the reporting regime set out in PS31/16 'Credit union regulatory reporting'. The PRA has also published updated templates which include several technical improvements and are available on the Credit unions - Financial returns webpage. Please note, credit unions who have already submitted their returns using the templates issued via BEEDS in mid-January do not need to resubmit them. See the document below for more information.

Credit union reporting - clarifications 

February 2017

On 23 February, the PRA published PS4/17 ‘Responses to CP36/16 and correction to PS2/16 PIN rules’ which includes publication of an update to SS2/16 ‘The prudential regulation of credit unions’.

January 2017

On 3 January, the new electronic reporting requirements for credit unions took effect following Policy Statement 31/16 'Credit unions regulatory reporting'. Details of the new forms and notes, and the Bank of England’s Electronic Data Submission (BEEDS) portal which will be used to submit returns are now available on the ‘Credit unions – Financial returns’ webpage. As outlined in the update on 15 December 2016, principal users will be emailed separately with information on how to access BEEDS and next steps by 6 January.  

December 2016

On 15 December, following a request for details of principal users for the new Bank of England’s Electronic Data Submission (BEEDS) portal (see update on 14 November 2016), the PRA emailed all principal users confirming some key dates and actions ahead of the new electronic reporting requirements which take effect from Tuesday 3 January 2017. Principal users have been advised the following:

  • By 6 January - principal users will receive an email from the BEEDS team which will: i) confirm the credit union is registered to use the BEEDS portal; ii) provide the web address of the portal and also a temporary password; and iii) include an electronic copy of the BEEDS portal user guide and a list of key contacts. From that point, the system will be partially available for principal users to log into the portal, create a permanent password and create additional users for their credit union, although they will not be able to submit returns. 
  • By 17 January – principal users will receive notification that regulatory returns are available to submit to the PRA. The BEEDS portal will automatically generate returns for submission and will email the principal user to confirm when a credit union’s returns are ready for submission. For most credit unions, the first return they must submit on the portal will be the quarterly return for the period ending 31 December 2016. Credit unions with a September year-end will be required to submit their annual return for the period ended 30 September 2016 on the new system.
The ‘Credit unions – financial returns’ webpage will also be updated to reflect the new reporting requirements on 3 January 2017. If credit unions have any questions regarding the points above or the BEEDS portal, please call 020 7601 5360.

November 2016

On 21 November 2016, the Prudential Regulation Authority (PRA) published CP41/16 ‘Deposit protection limit’ which sets out the PRA’s proposals to reset the deposit protection limit at £85,000. 

On 14 November the PRA published PS31/16 ‘Credit unions regulatory reporting’ which provides feedback to responses to Consultation Paper (CP) 24/16 ‘Credit union regulatory reporting’ and sets out final rules, updated notes on completing credit union returns and updated annual and quarterly returns. The new reporting requirements take effect from Tuesday 3 January 2017.

Credit unions will be required to use the Bank of England’s Electronic Data Submission (BEEDS) portal for the submission of quarterly and annual returns. The PRA supervision team will be contacting credit unions to request some basic details to grant access to the portal. This will include a request for the nomination of a ‘principal user’ who will: i) act as the main contact for the PRA with respect to BEEDS; ii) complete the credit union’s registration on the BEEDS; and iii) be able to register additional users and submit returns. Credit unions should ensure they respond to the request by Friday 9 December 2016. Following this, further instructions on how to access BEEDS and an information guide will be sent directly to the nominated principal user.

Details of the BEEDs portal, including how to access it and support, and the updated reporting notes and templates, which take effect from Tuesday 3 January 2017, are available on the ‘Credit unions regulatory reporting – supporting materials’ webpage. Firms with a 30 September year end wishing to submit their quarterly return for the period ending 31 December 2016 should wait until  3 January 2017, when the new notes and templates take effect.

October 2016

Update on CP24/16 ‘Credit union regulatory reporting’ – next steps

The consultation period for CP24/16 ‘Credit union regulatory reporting’ closed on 5 September 2016. The PRA is reviewing responses with the aim of issuing final policy by the end of the year with new rules taking effect on 3 January 2017.

As set out in the CP, the PRA proposed that credit unions only enter or upload their quarterly and annual returns and regulatory data electronically on a system.
To access the system, credit unions would enter a username, a password and some form of secondary identification, similar to the systems generally used to access online banking. To ensure that we have the right details, the Credit Union Supervision team will be contacting credit unions in early November to request some basic details that would allow them to access the system.
We anticipate credit unions will use the system to submit the December 2016 quarterly return and the annual return for the period ended 30 September 2015. Credit unions who would usually submit their annual return prior to January 2017 should send their annual accounts – but not their return - to the PRA via their usual method. This change in reporting should have no bearing on any credit union wishing to hold its AGM, sign off its accounts and pay its members a dividend prior to January 2017.
On current plans the system will go live on 3 January 2017. Ahead of this, the PRA will aim to provide a further update to credit unions on:
  • the final policy following CP24/16;
  • system login details; and
  • how to access the new system and the support that will be available.

September 2016

On 5 September 2016 the PRA published Policy Statement (PS) 23/16 'Responses to Chapter 5 of CP41/15 - amendment to the definition of credit unions'. This policy statement provides feedback to responses and final rules for Chapter 5 of Consultation Paper 41/15.

Responses to Chapter 5 of CP41/15 - amendment to the definition of credit unions - PS23/16 

July 2016

On 4 July 2016 the PRA published Consultation Paper (CP) 24/16 'Credit union regulatory reporting'. The CP sets out proposals for changes to the reporting requirements that apply to credit unions: these replace the returns that must currently be submitted and require that the new returns be submitted electronically. Click on the link to the consultation below for more information.

Credit union regulatory reporting - CP24/16

April 2016

The Senior Managers Regime (SMR) came into force on Monday 7 March. Key points for credit unions from the new regime are highlighted below:

  • Senior Management Function (SMF) 8 is the the only mandatory PRA-designated function for credit unions (SMF17 Money Laundering Reporting Officer is a mandatory FCA-designated function). While credit unions have the option to do so, there is no PRA requirement or expectation to make use of the other SMFs (eg Chief Finance Function (SMF2) or Chairman Function (SMF9)). More than one individual can perform the SMF8.
  • There are 9 mandatory Prescribed Responsibilities that apply to credit unions. A credit union must ensure it has at least one person (who must be an SMF) designated as responsible for each one of these responsibilities. There are additional Prescribed Responsibilities which apply to banks and building societies of a certain size. Larger credit unions may wish to allocate these among their SMFs but are neither required nor expected to do so.
  • Applications for pre-approval as an SMF8 (or, if applicable another SMF in a credit union) should be accompanied by a Statement of Responsibilities setting out the key responsibilities which the candidate will have in their role. Credit unions can use the Connect system to submit their applications. The system will allow them to access a template Statement of Responsibilities. The number of applications under the SMR is expected to reduce for credit unions relative to the Approved Persons Regime, and the PRA will only contact credit unions where necessary. Credit unions are also required to produce, submit and maintain a Responsibilities Map setting out their governance arrangements. Responsibilities Maps should reflect the size and complexity of the underlying institutions; for small credit unions with a straightforward business model a relatively simple plan will suffice.

Where an individual is put forward for approval, the PRA will require credit unions to attach the individual's CV to the application.

February 2016

Update on 5 February - On 1 February 2016, the PRA held an industry briefing on Policy Statement 4/16 ‘Reform of the legacy Credit Unions sourcebook’. A copy of the slides from the event is available below. A link to the information published by the Financial Conduct Authority (FCA) in respect of this statement is also available below.

The reform of the legacy Credit Unions sourcebook – presentation to credit union trade associations.

FCA PS16/1: Reform of the legacy Credit Union sourcebook

Update on 1 February - The PRA and FCA published PS4/16’ Reform of the legacy Credit Unions sourcebook’. The PS includes feedback to CP22/15 published jointly in June 2015, 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 Credit Unions Sourcebook as a result of CP14/31 relevant to the accountability regime. 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).

Reform of the legacy Credit Unions sourcebook – PS4/16