Credit Unions in the UK are strictly regulated, and are members of the Financial Services Compensation Scheme (FSCS)
Credit Union Regulation
The main Act of Parliament which governs how credit unions operate is the Credit Unions Act 1979. This sets out the objects of a credit union: -
The Act states that credit unions must have their accounts audited annually by a qualified auditor and that they must be insured against fraud or theft.
Since July 2002 Merthyr Tydfil Borough Credit Union has been regulated by the Prudential Regulation Authority (registration number 213643), as are banks and building societies. The performance of each credit union is monitored by the Prudential Regulation Authority and The Financial Conduct Authority and senior staff and volunteers involved in the running of the Credit Union must be approved by them.
If you have any concerns about how your Credit Union is operated, you are invited to discuss them with staff or a Board or Supervisory member.
The Financial Services Compensation Scheme
We are covered by the Financial Services Compensation Scheme
The FSCS can pay compensation to depositors if a credit union is unable to meet its financial obligations. Most depositors, including most individuals and small businesses, are covered by the scheme.
In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the credit union, including their share of any joint account, and not to each separate account.
For further information about the scheme (including the amounts covered and eligibility to claim) please see the FSCS Booklet, ask at your local branch or refer to the FSCS website www.fscs.org.uk or call Freefone 0800 678 1100.
Credit union members also have the option of complaining to the Financial Ombudsman Service, if they don't get satisfaction from their credit union's internal complaints procedure.