PRA Letter to Credit Unions on Covid-19

The PRA have today issued a letter to Credit Unions on Covid-19. The letter contains a number of key points for Credit Unions to consider.


The PRA allows Credit Unions to apply to the PRA for a modification to change the provisioning rules. Under the modification the provisioning ratios would change from 35%/60%/80%/100% to 20%/40%/60%/100%.  The modification is available from today until 1 January 2021. The PRA state that Credit Unions should consider whether or not they should take this modification taking into account their credit risk and emphasises the overarching requirement to have an adequate provision remains. Care needs to be taken with using this modification as to whether the reduced levels still provide an adequate provision and it should be remembered that the modification only lasts until 1 January 2021. Amounts over the previous minimum may also need to remain and would advise speaking to your auditor before reducing these amounts.


For returns due on or before 31 May 2020 the PRA will accept delayed submission. They will grant a 2 month delay for accounts and annual returns and a 1 month delay for quarterly returns. They are still encouraging timely submission and ask that the extensions are only used where the Credit Union is experiencing particular challenges.

Capital and Liquidity

The Regulators emphasise the need to monitor liquidity and capital in the current situation and to notify the Regulator as soon as you drop below the capital requirements.

Further Information

The full letter can be found by clicking here.