FSCS protection for My Community Bank

katejo

The savings account guidance on this web site states that My Community Bank does have FSCS protection up to the normal £85 K. However, this older discussion from 2022 claims that this is incorrect. My Community Bank - Page 2 — MoneySavingExpert Forum
Which one is right? I liked the idea of supporting a credit union so made a modest investment 8  months ago. In September, I will have to decide whether I want to continue it. I am confused by the conflicting information. Thanks

Band7

I believe they have substantially clarified the FSCS protection, although not necessarily on the My Community Bank (MCB) website. It actually comes through the bank / Building Society / Credit Union with whom your money gets deposited.

I recently opened an account through MCB. It was assigned, during the application process, to Castle Community Bank  (CCB), and the CCB FSCS cover applicable to my money was made quite clear.

MCB works pretty much along the same principles as Raisin or HL Active Savings - they provide a concierge service to a number of financial institutions, each of which has their own FSCS cover (though perhaps shared with another financial institution, like some banks do). 

I would suggest you need to check at the time of application whether you are satisfied with the FSCS cover offered for the account you are applying for. If you aren't, don't proceed. Chances are, though, that you will not see any problems.

masonic

katejo said:

The savings account guidance on this web site states that My Community Bank does have FSCS protection up to the normal £85 K. However, this older discussion from 2022 claims that this is incorrect. My Community Bank - Page 2 — MoneySavingExpert Forum
Which one is right? I liked the idea of supporting a credit union so made a modest investment 8  months ago. In September, I will have to decide whether I want to continue it. I am confused by the conflicting information. Thanks

That thread discusses two different legal entities, one which has FSCS protection and the other which does not. One acts as an intermediary for the other. With such relationships, you need to clearly understand the chain of custody of your money. It will not be protected while it is being held by any institution that does not have the 'Accepting deposits' or 'Client Money' regulatory permissions. Permissions can be checked here: https://register.fca.org.uk

My Community Bank does have FSCS protection and that is made clear in the thread you linked on page 1. The same is true of Castle Community Bank.

My Community Finance is a trading name of Amplifi Capital, which is a credit broker and e-money institution. Therefore there is no FSCS protection while it is in possession of your money. To ensure you have end-to-end FSCS protection on your money, you would need to ensure that it does not pass through MCF/Amplifi.

To compare with a service I am more familiar with, namely Raisin, it can be verified that money sent there is being transferred directly to an individual holding account in the saver's name provided by ClearBank (with FSCS protection). It is transferred directly between this account and the savings product, so at no time is the money lacking FSCS protection. It can be verified using a sort code checker that the account you are asked to transfer money to is owned by ClearBank and when you make the transfer, you can verify via Confirmation of Payee that the destination account is in your name and therefore not an account owned by Raisin.