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Prudential Regulation Authority - CP 8/14 - Regulated feed and levies: rates proposals 2014/15

On behalf of our member credit unions we would like to use the opportunity of this consultation to express our strong support for the continued proportionate and sensitive treatment of credit unions for the purposes of regulatory fees and levies. Credit unions occupy a unique place in the regulatory structure of the UK’s financial services sector: dual-regulated as deposit-takers yet significantly smaller on the whole than their peers.  Furthermore, credit unions are actively and deeply involved in providing fair and affordable access to financial services to those that are unable to access such services elsewhere.  In this, as detailed above, the sector has been continually supported and encouraged by Government and various others.   

In light of this, we feel that it is entirely appropriate that credit unions should continue to receive lower minimum fees in the case of the very smallest institutions.  Similarly, we feel that the fact that even the very largest credit unions pose little or no systemic threat to financial stability is a strong basis upon which to charge a fee premium of the largest deposit takers who receive heightened oversight and scrutiny following the financial crisis and the various banking scandals since then.

We welcome efforts to reduce the overall burden of regulatory fees relative to last year however we do remain concerned that the regulatory structure established in 2013 is likely to consistently cost the industry more to maintain than its predecessor the FSA.  The National Audit Office recently highlighted that fees increased from the FSA by 24% in 2013/14. While we recognise the vital role that the regulatory authorities play in maintaining stability and protecting consumers, we are also acutely aware that the burden of fees, if not controlled, has the potential to weigh down firms’ ability to deliver services cost-effectively.  In the case of the credit union sector, this can be the difference between providing a service or not. Therefore continued efforts to drive down the fee burden and improve the efficiency and effectiveness of regulation will always receive the support of the credit union sector.

The full response is available to download on the right hand side.