The Irish Credit Union sector has changed further recently given the Ministers for Finance’s announcement of phase 1 of the Interim report of the Commission examining Credit Unions.

“The Interim Report of the Commission on Credit Unions, acknowledging a strong future for the sector, has recommended strengthening of the regulatory framework they operate in. While the detail of the legislation is yet to come, it is expected that Credit Unions will have to learn to work more successfully with additional regulation in areas of compliance and risk management and governance.
 
Although not a surprise to the sector, the reality of the proposed changes will bring a significant burden of change and re-skilling to many credit unions relying on a volunteer ethos. The recommendations include extending the Central Banks administration sanction regime to Credit Unions, without doubt, this signals that full compliance with Central Bank regulations will be the only way forward” said Colm O’Grady, Credit Union Partner, Russell Brennan Keane.

The report includes the reassurance of the sectors future and retention of the State's deposit guarantee. Other recommendations will see the beginning of financial contributions from the Credit Unions under the scheme, the establishment of a stabilisation fund and developing internal audit functions.

“This much anticipated report sends a clear message that credit unions are entering a new world of compliance and regulation that will mirror the existing regulatory framework of the banks.  It has been signalled that legislation will be published early therefore it’s vital that the Credit Union sector digests this proposed legislation quickly, has a voice in its formation and most importantly, it’s implementation. Credit Union Boards have been conditioned for change over the past year and the sector has even a more vital role than ever to play in the Irish financial services landscape as the economy stabilises and recovers. This new journey for them will lead to a more viable and robust sector to serve generations in the future.” said Colm.

Colm O’Grady,
Credit Union Partner,
Russell Brennan Keane.
 
Email: cogrady@rbk.ie
Phone No: +353 9064 80600 

Colm has worked with Credit Unions for over 20 years and is well experienced on the issues and complexities the sector is currently facing. Colm was also the author of the just released a Credit Union Benchmarking Report on the sector.  The report is available at www.rbk.ie/cubenchmarking