Prudential Regulation Authority Rulebook

10.1

A credit union must ensure that the governing body reports to the members at the annual general meeting of the credit union on the following matters:

1. (1) the credit union’s compliance, or otherwise, with Depositor Protection 11 and:
1. (a) Depositor Protection 12, 14 and those requirements of Depositor Protection 15 that relate to Depositor Protection 11; or
2. (b) Depositor Protection 49 to 51,
3. as applicable;
2. (2) whether the credit union has maintained at all times a policy of insurance complying with 2.10;
3. (3) any additional activities the credit union is carrying out and whether or not it is in compliance with any requirement in this Part applicable to those additional activities; and
4. (4) if the credit union has more than 15,000 members, whether or not it is in compliance with any requirement in this Part applicable to a credit union with more than 15,000 members.

10.2

A credit union must:

1. (1) establish, implement and maintain an up-to-date lending policy statement approved by the governing body that is designed to protect the viability and sustainability of the credit union;
2. (2) ensure that its lending policy statement is prudent and appropriate to the scale and nature of the its business; and
3. (3) review and approve its lending policy whenever there is a change in circumstances of the credit union and, in the absence of any such change, on an annual basis.

10.3

A credit union that is carrying out any additional activity or has more than 15,000 members must:

1. (1) establish, implement and maintain an up-to-date financial risk management policy statement approved by the governing body;
2. (2) ensure that the financial risk management policy:
1. (a) addresses both interest rate and funding risk;
2. (b) covers aggregate limits on holdings of investments and borrowings from sources other than members;
3. (c) deals with avoidance of excessive funding concentrations (both source and time-band concentrations);
4. (d) details the organisational arrangements, systems and controls in respect of these matters; and
3. (3) ensure that its governing body monitors and assesses the risks associated with the carrying on of such activities or with having more than 15,000 members on at least a monthly basis.

10.4

A credit union referred to in 10.3 must ensure that the governing body reviews and approves its financial risk management policy whenever there is a change in circumstances of the credit union and, in the absence of any such change, on an annual basis.

10.5

A credit union must:

1. (1) establish, implement and maintain an up-to-date liquidity management policy statement approved by the governing body; and
2. (2) ensure that the governing body reviews and approves its liquidity management policy statement whenever there is a change in circumstances of the credit union and, in the absence of any such change, on an annual basis.

10.6

A credit union must ensure that:

1. (1) it sets and documents large exposure limits in a large exposure limits policy to avoid concentration of risk;
2. (2) the governing body’s responsibilities include the monitoring of large exposures and the review of the credit union’s compliance with the large exposures policy; and
3. (3) the governing body reviews the large exposures limits policy whenever there is a change in circumstances of the credit union and, in the absence of any such change, on an annual basis.

10.7

1. (1) A credit union must send to the PRA a copy of its audited accounts published in accordance with section 82 of the Co-operative and Community Benefit Societies Act 2014 or provided in accordance with article 49 of the Credit Unions (Northern Ireland) Order 1985.
2. (2) The accounts referred to in (1) must:
1. (a) be made up for the period beginning with the date of the credit union's registration or with the date to which the credit union's last annual accounts were made up, whichever is the later, and ending on the credit union's most recent financial year end; and
2. (b) accompany the annual return submitted to the PRA as may be required by the PRA under rules, unless they have been submitted already.