New Version of CREDS Released

The PRA have today issued a new version of their Credit Union rule book (CREDS). There are a number of significant changes from the proposals, issued late last year, including:

  • The 10% capital limit proposed for larger Credit Unions will now be made up of a 8% minimum and 2% buffer. The 2% buffer only applies from 30 September 2018.
  • Allowing loans over 12 months in arrears to be provided for rather than written off
  • The initial proposals stated Credit Unions must meet fixed ratios to be able to carry out additional services. While the ratios remain, Credit Unions will now be able to set the level of these ratios based on its individual business model (the capital ratio remains fixed). The PRA has set out indicative requirements and expects the levels set by Credit Unions to be justifiable.
  • Maximum deposit limit is removed (to an extent). You now have to tell the PRA at least 5 days before issuing shares above this limit, and they can refuse you permission.
  • Maximum lending cap of £500,000 is removed.
  • More restrictions on investments for Credit Unions currently classed as version 2.

We will issue further blogs covering the new requirements in more detail. The new rule book comes into force on Wednesday apart from parts of section 12. For a full understanding of the rules then please see the full version of CREDS which can be found by clicking here.

Update: more information on criteria for additional services can be found by clicking here.

 

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2 Replies to “New Version of CREDS Released”

  1. “The 10% capital limit proposed for larger Credit Unions will now be made up of a 8% minimum and 2% buffer. The 2% buffer only applies from 30 September 2018.”

    What constitutes a ‘larger Credit Union’?
    When does the 8% minimum apply from?

    Thank you.

    1. The new version of CREDS applies from today and that would include the 8% minimum requirement for larger Credit Unions. The higher capital requirement applies to Credit Unions with over 15,000 members or more than 10 million of assets or those offering the additional services.

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