How we regulate Credit Unions
From 2 July 2002, we (the FSA) became responsible for the regulation of credit unions in England, Scotland and Wales. As with all the firms that we regulate, credit unions are now subject to the requirements of the Financial Services and Markets Act and the rules in the FSA Handbook.
In recognition of the fact that credit unions had not, before, been subject to full regulation and that the majority of them are run by volunteers, we have developed a regulatory regime that is practical and takes account of their special characteristics. So, we created a specialist sourcebook (CRED), which distils most of the parts of the FSA Handbook that are relevant to the activities of most credit unions into an accessible and user-friendly manual. Credit unions will, in some cases, find it necessary to refer to the FSA Handbook.
Key features of the FSA regulatory regime for credit unions are:
- Credit unions have to meet a basic test of solvency. Additional capital requirements are set for larger credit unions, reflecting their potentially greater impact on consumers should they fail.
- Credit unions are required to maintain a minimum liquidity ratio.
- Key personnel running credit unions have to meet the standards set out in the FSA’s rules for Approved Persons.
- Senior management of a credit union must take reasonable care to plan, direct, manage and maintain systems and controls as are appropriate to the business of their credit union.
- Credit unions are required to comply with our rules on Money Laundering. These include requirements for appointing a MLRO, Identification of members, training, internal and external reporting.
- Credit unions are required to operate an effective complaints scheme with members having access to the new Financial Ombudsman Service if they are not satisfied with the way their complaint has been handled.
- Credit unions have access to the Financial Services Compensation Scheme providing members with deposit protection for the first time.
Credit union specialist sourcebook
Our regulatory arrangements for credit unions are in the specialist Credit Union Sourcebook, which forms part of the FSA's Handbook of Rules and Guidance. In finalising the Sourcebook, we carried out extensive pre-consultation with the credit union movement and other interested parties. This drew a record number of responses to Consultation Papers covering aspects of the new regulatory arrangements.
Changes to CRED are made through FSA legal instruments. A list of all CRED instuments is available on the Handbook pages.
The FSA Register
The FSA Register is a public record of financial services firms, individuals and other bodies that fall under our regulatory jurisdiction as defined in the Financial Services & Markets Act 2000 (FSMA).
To check the details held on your credit union visit the FSA Register.