department of finance

Consumers & Minister’s advice at one in supporting Credit Union development

By | News

In 2016 the Minister’s Advisory Committee took the brave decision to review the implementation status of the recommendations made by the Commission on Credit Unions back in 2012 and reported specific areas where proposals were not introduced and may be negatively impacting credit unions’ business development.

Commenting on the report, Kevin Johnson CEO of CUDA said, “In recent years it has been widely reported that credit unions should develop their business models and grow income in a prudent manner and these proposals will contribute to that objective. This is supported by a survey of 1,000 consumers conducted by iReach just before Christmas, which found that the majority or 74% of adults believe that Credit Unions could have either a big or some impact on the banking market in Ireland and should pool their resources to compete with banks.”

In welcoming this report, CUDA commended the work of CUAC, the Implementation Group and the stewardship provided by the Department of Finance. CUDA now hopes that the Registrar of Credit Unions will embrace the proposals contained in the report, in particular implement the proposals that will see credit unions with the skills and financial strength being permitted to provide more credit, and indeed making different forms of credit accessible to more people.

Kevin went on to say, “Credit unions have demonstrated incredible resilience throughout the recession, and this can be attributed to good governance and compliance with relevant regulation and sees them rightly occupy a position of a trusted advisor to their members. They have earned the right to have legislation and regulations that mirror this, in particular the lending proposals in the report including the basis of the calculation of permitted limits.”

CUDA has for some time advocated the position to set aside a one size fits all regulatory approach and endorse the proposal that when new regulations are being introduced the principle of not restricting any Credit Union from services, or limits, they can currently provide for their members, with automatic inclusion in higher tier for Credit Unions of a certain size and risk profile, and clarity in any approval process. CUDA also calls on all stakeholders to consider modernisation of credit union legislation, such as the common bond, to deal with anomalies that are unintentionally preventing some members, or potential members, access to credit union services.

CUDA will be communicating directly with current serving Government Ministers to reassure them of the prudence of all the proposals, as endorsed by their colleague and Minister for Finance, and how these are appropriate to allow more people experience the benefit of not-for-profit mandate of credit unions and their volunteer ethos and community focus, while giving due regard to the need to fully protect members’ savings and financial stability.

Note to the Editor

CUDA, the Credit Union Development Association, was legally incorporated in 2003. In its early days it was the representative voice, on behalf of its owner member credit unions, with legislators and regulators. It has since evolved and now, as well as providing a ‘voice’, it is increasingly providing support facilities in the areas of regulatory compliance, risk management, shared services and competency development.