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<p>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.</p><p>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.</p><p>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.</p>
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