MADISON, Wis.—Sustainable finance will become an increasing area of focus for national-level regulators across the globe in 2022 as financial institutions expand investments in clean energy loans and other environmentally-friendly products, according to a new report from the World Council of Credit Unions (WOCCU).
Watching those developments will be a key focus of its international advocacy, WOCCU sated in its newly released 2022 Global Regulatory Update for Credit Unions and Financial Cooperatives.
“Sustainable finance will transform the regulatory landscape for credit unions on many fronts, including investments, governance, disclosures, reporting and products,” said Panya Monford, WOCCU assistant general counsel of international advocacy. “Credit unions are well positioned to demonstrate their value within social considerations given their unique model, which supports local communities.”
Seeking Proportionality
According to WOCCU, greater financial inclusion made possible through guidance from international standard setting bodies that “emphasizes the importance of proportional regulatory treatment” for credit unions is also a major focus for 2022.
“Proportionality continues to be a priority for World Council and is necessary for the tailoring of regulations to the size, risk and complexity of the institution,” said Monford. “Rules should be adopted that reflect the unique nature of the credit union cooperative model. They need to reflect the systemic importance, the cross-border activity (or lack thereof) and, more generally, the risks to which they are exposed. We know that the failure of national-level regulators to use proportionality, which is inherent in most international standards, can lead to or compound financial exclusion.”
WOCCU said its Global Regulatory Update is put out on an annual basis to help credit unions and financial cooperatives prepare for the compliance issues most likely to impact them in the year ahead.
Additional Issues
The new edition also covers several other leading regulatory issues affecting credit unions across the globe, including:
- Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
- Payments.
- Digitalization/Cybersecurity/Cryptocurrency.