PS16/1: Reform of the legacy Credit Unions sourcebook

In this policy statement we provide feedback on responses to CP15/21 ‘Reform of the legacy Credit Unions sourcebook’ and set out final rules and guidance. We also provide the changes to our Credit Unions Sourcebook (CREDS) as a result of our December 2014 consultation on forms, transitional and consequential aspects of the new accountability (CP14/31). This policy statement is being published jointly with the Prudential Regulation Authority (PRA).

Why are we issuing this policy statement?

In CP15/21 we consulted jointly with the PRA to reform some of our rules for credit unions. The PRA proposed to replace CREDS in its entirety, and we proposed keeping the parts of CREDS that relate to our statutory responsibilities, and removing rules and guidance that do not specifically relate to our objectives. The changes to our rules complement the PRA’s changes, by removing unnecessary duplication and potential inconsistency with PRA rules, and making some improvements to CREDS. Our provisions will maintain the focus on consumer protection while clarifying the rules that credit unions must follow.

In CP14/31 we proposed some forms, transitional and consequential aspects of the new accountability regime for the banking sector.   In July 2015 we provided our feedback on the responses received in relation to the core forms and on the transitional arrangements for the new regime, in CP15/22. In August 2015 we provided further feedback and final rules on the consequential amendments needed to reflect the new regime in PS15/21. However, this did not include the amendments needed to CREDS, so our response now forms part of this PS.

PS16/1: Reform of the legacy Credit Unions sourcebook [PDF]

Who will this affect?

The proposed changes will affect all credit unions. The new FCA rules may also be of interest to consumers that are currently, or may become, members of a credit union, as well as to consumer groups that have an interest in credit unions.

What are the next steps?

The changes in the rules that form part of this Policy Statement as a result of CP15/21 will come into effect on 3 February 2016. Those made as a result of the accountability regime will come into effect on 7 March 2016. Credit unions will need to consider what changes they may need to make as a result of these changes, particularly noting:

  • the requirement for credit unions in Great Britain to submit audited accounts to us (as well as to the PRA)
  • the increased expectations on all United Kingdom credit unions’ governing bodies to review relevant policies and procedures
  • the need to update compliance and policies and procedures manuals as appropriate

Credit unions should also note that they must inform us of any changes to their complaints contact.

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