HM Treasury - Regulatory reform: draft secondary legislation
Credit unions have benefitted greatly from the introduction of formal regulation of the sector in 2002. The advent of full prudential regulation coincided with the beginning of a new period of growth in the credit union sector and has contributed to a process of professionalisation and modernisation.
In September 2001, the year end prior to full FSA regulation, membership of credit unions stood at 365,934 with £263 million in assets – by June 2012, these figures stood at 901,720 and £941 million respectively. This process has been further supported by the protection of credit union members by the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS).
To this end, we appreciate credit unions’ continued treatment alongside the larger deposit-taking sectors of the banks and building societies.
However, we do have some concern as regards the potential for credit unions to be unduly burdened by the new regulatory system. Despite strong growth over the past decade or more, credit unions remain a small sector facing significant developmental challenges. Resources are stretched and regulatory demands which might be easily absorbed by larger organisations can have a significant detrimental effect upon smaller organisations.
We hope, therefore, that through the process of regulatory reform proportionate and appropriate regulatory requirements are maintained for the credit union sector in order to facilitate its continued development in line with wider Government policy. ABCUL is keen to support the process of transition and by ensuring our membership is fully informed about the changes and we are keen to work with the PRA and FCA in this.
The full response can be downloaded on the right hand side.