To ask the Chancellor of the Exchequer, what discussions he has had with credit unions on support during the covid-19 outbreak; and if he will make a statement.
27 April 2021
HM Treasury officials have regularly engaged with the Financial Conduct Authority and Prudential Regulation Authority to understand the impact of the COVID-19 pandemic on the credit union sector. I have also engaged with representatives from the credit union sector through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period.
Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and community development finance institutions in England during the COVID-19 pandemic. On 20 May 2020, the Government announced that additional funding through the dormant assets scheme would be released immediately to Fair4All Finance. This included an expanded Affordable Credit Scale-up Programme, which aims to improve the access and availability of affordable credit. I am also aware that credit unions have had access to wider COVID-19 support schemes, including the Coronavirus Job Retention Scheme, and grant funding from local authorities.Capital requirements for credit unions are a matter for the Prudential Regulation Authority (PRA). In March 2020, the PRA concluded its consultation into simplifying the capital regime for credit unions. This reduced complexity by removing the link between a credit union’s activities and membership with capital requirements, removed the old 2% capital buffer, and introduced a graduated rate approach to capital requirements. These proposals were broadly supported by the credit union sector.