Loss of FSCS Protection for your deposits

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On the 6 October, the PRA launched consultation paper CP20/14 on Depositors Protection. CP20/14 sets out a number of proposals that will have a major impact on Credit Unions. This includes:

  • Loss of FSCS protection for Credit Union’s deposits– Currently small Credit Union’s deposits with banks are protected up to £85,000 (subject to the Credit Union’s net asset balance). Under the proposals Credit Union’s own funds would have no protection. Member’s balances with the Credit Union would continue to be protected as before.
  • Single Customer View– The current opt out for small Credit Unions from filing an electronic SCV will be removed by these proposals. The filing time for SCV would also be reduced to 24 hours and the format would be standardised across all organisations.
  • Eligibility– Most large corporate depositors would be eligible for deposit protection under the proposals. There would also be increased protection of temporary high balances.
  • New disclosure requirements– There would be a number of changes to the disclosure requirements if the proposals come into force.

We would recommend that Credit Unions review the consultation paper in full to see the impact it will have. Responses to the consultation must be received by the PRA by 6 January 2015. The consultation and related information can be found by clicking here.