CRED 15
Decision procedure,
penalties and enforcement
CRED 15.1
Application and purpose
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CRED 15.1.1
See Notes
This chapter applies to credit unions and is intended to draw their attention to:
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CRED 15.1.2
See Notes
The FSA's effective
and proportionate use of its investigation and enforcement powers plays an
important role in the pursuit of its regulatory
objectives.
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CRED 15.2
Industrial and Provident Societies legislation
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CRED 15.2.1
See Notes
The FSA's investigation
and enforcement powers in the Industrial and Provident Societies Act 1965,
the Friendly and Industrial and Provident Societies Act 1968 and the Credit
Unions Act 1979, although its main powers derive from the Act and the Unfair Terms Regulations.
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CRED 15.2.2
See Notes
For ease of reference:
- (1) Annex 1 to this chapter (CRED 15 Annex 1 G) contains a table of the FSA's investigation and enforcement powers under the Industrial and Provident Societies Act 1965, the Friendly and Industrial and Provident Societies Act 1968 and the Credit Unions Act 1979.
- (2) [deleted]
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CRED 15.2.3
See Notes
Some of the FSA's powers listed in CRED 15 Annex 1 G are similar to the powers listed in CRED 15 Annex 2 G. For example, the FSA has information gathering and investigation
powers under both the Industrial and Provident Societies Act 1965, as extended
by the Credit Unions Act 1979, and the Act.
These different powers enable the FSA to
investigate and enforce the different requirements imposed on credit unions by legislation.
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CRED 15.2.4
See Notes
In appropriate circumstances, the FSA may need to consider
which power to use, and whether to use powers, from one or more of the Acts.
Which power or powers are appropriate will vary according to the circumstances
of the case. Where the FSA is
exercising its investigation and enforcement powers, it will normally explain
to the credit union,
individual or other persons concerned
under which power, or powers, it is acting.
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CRED 15.2.5
See Notes
However, it is the responsibility of credit unions and individuals, or other persons connected to them to ensure that their actions comply with the requirements of the legislation and the FSA's rules, at all times. Credit unions and those involved with them can contact their usual supervisory contact at the FSA about the use of the FSA's investigation and enforcement powers.
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CRED 15.3
Decision Procedure and Penalties manual
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CRED 15.3.1
See Notes
The Decision Procedure and Penalties manual (DEPP) is relevant to credit unions because it sets out:
- (1) the FSA's decision making procedure for giving statutory notices (warning notices, decision notices and supervisory notices); and
- (2) the FSA's policy with respect to the imposition and amount of penalties under the Act.
- (3) [deleted]
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CRED 15.3.2
See Notes
The investigation and enforcement powers available to the FSA form part of the regulatory toolkit it will use to meet its regulatory objectives of protecting consumers, promoting public awareness, maintaining confidence in the financial system and reducing financial crime. Where a credit union, or an individual, has failed to comply with the requirements of the Industrial and Provident Societies Act 1965, the Friendly and Industrial and Provident Societies Act 1968, the Credit Unions Act 1979, the Act, the FSA's rules, or other relevant legislation (for example, the Criminal Justice Act 1993 and the Money Laundering Regulations), it may be appropriate to deal with this without the need for formal disciplinary or other enforcement action.
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CRED 15.3.3
See Notes
The proactive supervision and monitoring
of credit unions,
and an open and cooperative relationship between credit unions and their supervisors, will,
in some cases where a contravention has taken place, lead the FSA to decide against
taking formal disciplinary action. However, in such cases, the FSA will expect the credit union, or the individual,
to act promptly to take the necessary remedial action, agreed with its supervisors,
to deal with the FSA's concerns.
If the credit union,
or the individual, does not do this, the FSA may
take investigation or enforcement action in respect of the original contravention.
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CRED 15.3.4
See Notes
Where the FSA has concerns about a credit union, or an individual, it will normally
discuss its concerns with them before considering the use of its investigation
and enforcement powers. However, the FSA may
take action without discussing its concerns with a credit union in urgent cases or in cases
where the interests of consumers might otherwise be put at risk.
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CRED 15.4
Enforcement Guide
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CRED 15.4.1
See Notes
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CRED 15.4.2
See Notes
The FSA's enforcement powers in the Industrial and Provident Societies Act 1965, the Friendly and Industrial and Provident Societies Act 1968, the Credit Unions Act 1979 and the Act can be grouped into three broad categories, based on the type of procedure that applies to their use. The three broad categories are:
- (1) regulatory enforcement powers, which the FSA must exercise by statutory notice procedures;
- (2) civil enforcement powers, which the FSA must exercise by making application to the civil courts; and
- (3) criminal prosecution powers, which the FSA must exercise by bringing proceedings in the criminal courts.
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CRED 15.4.3
See Notes
When the FSA exercises its regulatory enforcement powers, the statutory notice procedure it must follow varies depending on the type of action to be taken and the provisions of the relevant legislation.
- (1) If the FSA is using its regulatory enforcement powers under the Act, it must give the reasons and various notices required by the Act and, in all cases, allow the person receiving the notice an opportunity to make representations. The FSA's decision making procedures for notices to be given by the Act are set out in DEC. CRED 16 provides an overview of DEC.
- (2) If the FSA is using its regulatory enforcement powers under the Industrial and Provident Societies Act 1965, the Friendly and Industrial and Provident Societies Act 1968 and the Credit Unions Act 1979, it will have regard to the Principles set out in CRED 3 and will, so far as appropriate, provide a process that is consistent with that in DEC.
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CRED 15.4.4
See Notes
When the FSA uses its civil enforcement powers and
criminal prosecution powers under the relevant legislation, it must follow
the procedures of the civil and criminal courts.
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CRED 15.4.5
See Notes
- (1) If the FSA is considering using its regulatory enforcement, civil enforcement or criminal prosecution powers under the Act, it will apply the policies on the use of those powers set out in ENF.
- (2) If the FSA is considering using its regulatory enforcement, civil enforcement or criminal prosecution powers under the Industrial and Provident Societies Act 1965, the Friendly and Industrial and Provident Societies Act 1968 and the Credit Unions Act 1979, it will, to the extent appropriate, apply the policies on the use of similar powers under the Act (as set out in ENF).
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CRED 15.5
Financial penalties for late submission of reports
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CRED 15 Annex 1
Enforcement Powers
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See Notes
| SUBJECT | SECTION OF THE RELEVANT ACTS | |
| CANCELLATION OR SUSPENSION OF REGISTRATION | ||
| Power to cancel the registration of a credit union | Industrial & Provident Societies Act 1965, s.16 as applied by Credit Unions Act 1979, s.20(1) | |
| Power to suspend the registration of a credit union | Industrial & Provident Societies Act 1965, s.17 as applied by Credit Unions Act 1979, s.20(1) | |
| INSOLVENCY PROCEEDINGS | ||
| Provision of information: when a credit is in receivership | Industrial & Provident Societies Act 1965, s.43 | |
| Provision of information: when a credit union is subject to a creditors' voluntary liquidation | Industrial & Provident Societies Act 1965, s.59 | |
| INFORMATION GATHERING AND INVESTIGATION POWERS | ||
| Power to require information from individuals who are, or have been, officers of a credit union | Industrial & Provident Societies Act 1965, s.48 extended by Credit Unions Act 1979, s.17(1) | |
| Power to appoint an investigator to look into the affairs of a credit union | Industrial & Provident Societies Act 1965, s.49 extended by Credit Unions Act 1979, s.18(1) | |
| AUDITING OF ACCOUNTS | ||
| Power to require the financial accounts of a credit union for past years to be audited | Industrial & Provident Societies Act 1965, s.9(c) | |
| COMPULSORY WINDING UP | ||
| Power to petition the court for the winding up of a credit union | Credit Unions Act 1979,s.20(2) | |
| PROSECUTION OF CRIMINAL OFFENCES | ||
| Power to prosecute offences under the Industrial & Provident Societies Act 1965, Industrial & Provident Societies Act 1968 and the Credit Unions Act 1979 | Credit Unions Act 1979,s.28 | |
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