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PRA - CP 4/15 - Depositor, dormant account and policy protection - ammendments

Response to the consultation

Our concerns in relation to the consultation proposals are limited. However, we use the opportunity of this consultation to remind you of our serious concerns arising from the proposals to which the consultation here relates in respect of implementing the recast Deposit Guarantee Scheme Directive. Our response to that consultation highlighted concerns in relation to a number of areas, in particular:

  • The removal of credit unions’ own protection under FSCS as depositors
  • The removal of the opt-out for deposit-takers with less than 5,000 accounts in relation to the Single Customer View electronic reporting requirements
  • The reduction of the deadline for submission of the Single Customer View file to 24 hours from 72 hours

We are keen to engage with the consultation team to discuss our concerns in more detail and would be grateful for the opportunity.

Another of the concerns we expressed in our response to the consultation related to the transitional arrangements for the implementation of the proposals. We expressed concern at the disproportionate likely costs facing credit unions in particular given their small scale and limited resources. We were keen to see an extended transitional period to enable credit unions sufficient time to manage implementation and to the degree that this consultation proposes an 18 month period for such purposes we are satisfied.

However, there are a number of elements – admittedly derived from the DGSD – which do not carry with them the luxury of an extended implementation period and therefore many of our concerns have not been allayed. In particular, updates to disclosure statements, eligible account marking and the creation of a SCV effectiveness report are all required by 3 July 2015 which provides very little time for credit unions to implement the required changes. We urge PRA to reconsider its position and whether it would be possible to provide flexibility for credit unions in expectations around their implementation of these requirements. The updating of communications and literature can be an extremely costly exercise as can IT upgrades and this is particularly the case for credit unions of limited resources.

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