SS2/23 - The PRA's approach to supervising credit unions - Update July 2023

The PRA published its updated supervisory statement SS2/23 which replaces SS2/16. This is the policy response to the consultation CP7/22 published in September 2022. It included revisions to the Credit Unions Part of the PRA Rulebook, largely to align with amendments to the Credit Unions Act that received Royal Assent in July 2023. 

The BSA's response to CP7/22 is here.

The BSA and NCUF broadly supported the proposals but called for caution not to apply standards designed for larger banks or building societies, so that the regime for credit unions is appropriately proportionate. We support the enhancements to credit union capital expectations. We strongly oppose applying the lending limits in SS20/15 to credit unions, given they are designed and calibrated for building societies. 

The BSA's response to CP7/22 is here

Previous PRA policy and consultations

PS 6/20 was published in March 2020 and set out the final policy relating to its consultation on the capital regime CP 28/19.   

• for credit unions with more than £10 million of total assets, to provide a greater degree of flexibility and remove barriers to growth by introducing a "graduated rate" approach and removing the 2% capital buffer.
• to reduce complexity in the capital regime by removing the association between credit union activities/ membership size and capital requirements, and to address the risks posed by these factors by other means.
• new expectations in SS 2/16 in relation to credit unions with a capital to assets ratio (CAR) in the 3-5% range, in which a credit union with a CAR below 5% should be prepared to engage more fully with the PRA.

The BSA's response to CP28/19 is here.

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The PRA published CP22/15 and the FCA published CP15/21 in 2015. The BSA response to these two consultations can be found here.