AUCKLAND, New Zealand–Co-op Money NZ, the trade association for this country’s credit unions and mutual building societies, said it welcomes a draft of the Regulatory Systems Amendments Bill by the Ministry of Business, Innovation and Employment (MBIE).
The exposure draft of the omnibus Regulatory Systems Amendments Bill 2015, which has been released prior to its introduction in Parliament early next year, includes proposed amendments to the Friendly Societies and Credit Unions Act (1982), which will bring significant benefits to New Zealand credit unions and their members, according to Co-op Money NZ.
"The Friendly Societies and Credit Unions Act of 1982 (FSCU Act) is an old and inefficient piece of legislation for the modern business environment that credit unions operate in. Under the current Act, credit unions have a very complex supervisory and oversight regime that adds unnecessary business costs and confusion for both our Member organizations and the public,” said Henry Lynch, CEO of Co-op Money NZ. “With the amendments in place, credit unions and associations will become incorporated entities with updated powers and this will bring them into alignment with other financial services providers in New Zealand."
The proposed changes to the FSCU Act will have credit unions established as bodies corporate, which will remove the requirement to have internal trustees, and will improve accountability, while reducing compliance costs, according oto its supporters. Proposed amendments will also allow credit unions to start financing member-owned SMEs, which will enable them to help more New Zealanders and their local communities
"These changes to the FSCU Act will bring New Zealand in line with other countries, and reduce compliance costs, while at the same time continuing the element of mutuality and the requirement of a common bond between members, which are the hallmarks of credit unions,” said Lynch. “As mutual organizations, these savings will ultimately be passed back to the mum and dad Kiwi households that bank with credit unions. Likewise, improving the efficiency by which credit unions may lend to their members’ businesses will assist credit union growth and also provide welcome funding for businesses in the local communities that these credit unions serve. SMEs make up more than 95% of all businesses in the country, and the ability to efficiently fund these firms will enable community funds to be used for local enterprises that will enrich the country’s economy.
Co-op Money NZ said it has been championing the changes for some time and meeting with various government authorities in the process.