DUBLIN, Ireland–reland’s government is considering a bill that seeks to help grow credit union lending in the country by permitting a wider range of offerings, including corporate CUs. It also includes provisions related to credit union boards.
As CUToday.info has reported, Ireland’s credit unions have what would in the United States be considered a very low loan-to-share ratio, with an industry average below 30%.
The Credit Union (Amendment) Bill is the first substantive legislation relating to credit unions to be introduced in the past decade and comes following a review of the policy framework within which credit unions operated, according to BusinessPlus.ie.
“The government said the bill would support investment in collaboration through the creation of corporate credit unions as an additional regulated vehicle through which credit unions could collaborate, with credit unions allowed to invest in ventures supporting credit unions,” BusinessPlus.ie reported. “It aims to improve member services by allowing credit unions to refer members to other credit unions and to participate in loans of other credit unions.”
Additional Proposals
As proposed, the bill would allow the Minister for Finance to set a maximum interest rate, currently fixed at 1% per month, to provide more flexibility for credit unions to price risk in a rising interest rate environment, the report explained, before adding, “Amendments to facilitate greater focus on strategic planning and to redress the balance of responsibility on the board between directors and management have also been written into the bill.”
The provisions made in the amendments include the option of making the manager a board member, reducing the minimum number of board meetings to six per year, reducing the frequency of policy reviews, and reducing the number of administrative issues to be mandatorily approved by the board, BusinessPlus.ie reported.
Three Policy Actions
In addition, the review also produced three non-legislative policy actions, according to the report:
- The Central Bank (which regulates credit unions), the Credit Union Advisory Committee and the Minister for Finance will enter into a memorandum of understanding to improve coordination on policy matters, while respecting regulatory independence.
- Central Bank has agreed to introduce an enhanced engagement protocol with credit unions.
- The government has amended the terms of reference of a stakeholder group, chaired by the Department of Finance, to widen attendance and enhance transparency with the sector.
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