Credit Unions

In all cases, we work closely with the regulatory stakeholders - the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and Financial Services Compensation Scheme (FSCS) to secure an orderly wind-down of the regulated entity. This ensures members' share deposits are made within the regulatory timeframe (normally seven calendar days from the declaration of default by the FSCS) and ensures all vulnerable members are dealt with in a fair manner. We are recommended as experts in these services by the trade bodies.

We are experts in assisting credit unions facing challenging trading conditions or insolvency and regulatory issues including capital requirements, Senior Managers Regime, Single Customer View (SCV) file preparation, wind-down planning and loan book provisions.

In any pre-Administration period, we work with the regulatory stakeholders to ensure that the vulnerable members’ strategy is revised and agreed beforehand with the FCA. This work also covers the necessary review and revisions to ensure the credit union’s single customer view file is complete and agreed with the FSCS. Preparation for this work involves on-site attendance to plan for the process, deal with member enquiries and assist vulnerable members to take appropriate steps to find alternative banking facilities.

We work alongside the trade bodies, volunteers and the board and its staff, as this facilitates an orderly wind-down of the firm.

We have acted in the following case scenarios:

• Bank informal wind-downs
• Assisting as a forensic expert on a FCA investigation in respect of a credit union’s regulatory failures
• Advising credit unions on their conduct and prudential regulatory obligations under the FCA and PRA
• Credit union wind-downs via Administration insolvency formal process

Our dedicated FS team is led by Managing Director Dina Devalia. Since 2012, Dina has specialised in advising credit unions facing:

• Challenging trading conditions or insolvency
• Both prudential and conduct regulatory issues
• Wind-down planning for the larger credit unions
• Capital requirement breaches/ceilings
• Treating Customers Fairly (TCF) and consumer duty obligations for vulnerable members
• SCV file preparation
• Loan book PRA provision breaches

Our extensive Credit Union experience

Led by Dina Devalia, our team has acted as Joint Administrator for numerous credit unions across Scotland, England and Wales. These Administrations and credit union wind-downs require specialist skills. Insolvency practitioners need to deal with both the statutory insolvency matters and be highly experienced in dealing with both prudential and conduct regulatory issues arising. Dealing with vulnerable members is a priority for the regulatory stakeholders.

These appointments include the following cases:

England

• South Tyneside Credit Union
• Solent Credit Union
• Birmingham Inner Circle Credit Union
• Hastings & Rother Credit Union
• Basildon Credit Union
• Waltham Forest Council Employee Credit Unions

Wales

• West Wales Credit Union
• Loans & Savings Abertawe Credit Union

Scotland

• North East Scotland Credit Union
• Greater Milton & Possilpark Credit Union
• Parkhead Credit Union
• Mercat Cross & The Bruce Credit Union
• North Airdrie Credit Union
• Faifley Credit Union
• Pioneer Mutual Credit Union
• Strathkelvin Credit Union

Dina’s experience also includes project management of the following credit union wind-downs:

• North Yorkshire Credit Union
• Cornwall & Isles of Scilly Credit Union
• Seven Four Credit Union
• Millom & District Credit Union
• Coastal Credit Union
• Enterprise The Business Credit Union

Credit Union Regulation

Credit unions are dual-regulated, which means that they are regulated by both the Financial Conduct Authority (FCA) and by the Prudential Regulation Authority (PRA). The rules and legislation applying to credit unions are set out in the following core legislation:

• The Co-operative and Community Benefit Societies Act 2014;
• Credit Unions Act 1979;
• The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011;
• SCV requirements as set out in the deposit protection part of the PRA Rules;
• Dormant Bank and Building Society Accounts Act 2008; and
• For Northern Ireland – Credit Unions (Northern Ireland) 1985