PRA has published its final rules for replacing the legacy Credit Unions sourcebook (CREDS) along with its feedback to consultation on the changes and the implementing FCA instrument. In light of feedback received to consultation some 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.

Most of the changes came into force on 3 February, whilst some will enter into force on 7 March to remain in line with the other provisions related to the accountability regime. Credit unions will need to consider what changes are needed, particularly noting:

  • the requirement for credit unions to submit audited accounts to FCA (as well as PRA);
  • the increased expectations on all UK credit unions’ governing bodies to review relevant policies and procedures; and
  • the need to update compliance and policies and procedures manuals as appropriate

(Source: PRA Reforms for the Legacy CREDS)