CUDA acts as a catalyst for the growth, development and expansion of progressive Credit Unions. Our main purpose is to support progressive Credit Unions in delivering their promise to their members to be the most reliable, trustworthy financial partner.
CUDA was formed in 2003 by its members in recognition of the real need for positive credit union leadership and development and as a response to a more competitive and increasingly complex business environment. Today CUDA membership is comprised of Ireland’s most progressive and leading credit unions, with a combined asset base of over €1.5 billion and over 250,000 members.
On the 27th November 2014, the Central Bank issued Consultation Paper CP88 and are now consulting on the draft regulations that it is proposing to introduce at the same time as the remaining sections of the 2012 Act are commenced. The regulations the Central Bank is introducing contain requirements that will apply to all Credit Unions in the following areas: Reserves, Liquidity, Investments, Savings, Borrowing, Systems, Controls and Reporting Arrangements, and Services Exempt from Additional Services Requirements.
Should the regulations be introduced as proposed in the Consultation Paper, potentially the consequence could be hugely damaging for CUDA member Credit Unions and the credit union sector as a whole. Amongst the proposals, the Central Bank is introducing a cap of member savings of €100,000. Following sight of the Consultation Paper, CUDA delivered a letter to the Governor of the Central Bank in advance of the publication of CP88 requesting the removal of the proposed savings cap from the draft regulations. CUDA highlighted serious concerns including reputational risk for the wider credit union movement, competition law issues, and a possible indirect State aid issue to the extent that the banking sector may gain an unfair State sponsored competitive advantage in attracting deposits in excess of €100,000 or otherwise benefit from the outflow of funds from the credit union sector.
CUDA will continue to act upon the inappropriate inclusion of a cap of savings in this manner, whilst not overlooking the other very serious issues contained in the Consultation Paper. We will be taking whatever steps are necessary to ensure the evolution of Credit Unions as envisaged by the Commission on Credit Unions.
CP88 can be found by logging onto CUSP. A CP88 Breakdown of Proposed Measures was prepared by CUDA and was also forwarded to CUDA Member Credit Unions.
Responding to the Minister for Finance's announcement today, 28th November 2014, on the Credit Union Stabilsation Scheme and the Restructuring Scheme, the Credit Union Development Association (CUDA) said that it welcomed the long overdue statutory based stabilsation scheme but was disappointed that the fund is not being built up by way of deposits from Credit Unions, which they would then own, rather it is a direct expense. However, we are pleased that the Minister has considered CUDA's request, and extended the time, from six years to ten, under which the fund will amass and that the rate of the levy will be reviewed after 3 years. This review will also present an opportunity to reconsider the fund as an asset of Credit Unions.
Speaking of the announcement, Kevin Johnson, CEO, Credit Union Development Association, said "While the establishment of the Stabilisation Scheme on a statutory basis is very welcomed, structuring the contributions as an expense seems penal on credit unions and their members, when we believe there is an alternative to build the fund through deposits from Credit Unions."
Objectives of the Credit Union Support Platform: