Significant milestone for Credit Unions

Jennifer Carroll MacNeill, the Minister for Financial Services, Insurance and Credit Unions, has finalised the Credit Union (Amendment) Bill 2022 in the Oireachtas, with the Bill passing the final stage in the Seanad today. It will now be sent to President Higgins for official signing.

Minister Carroll MacNeill stated:

“The Credit Union (Amendment) Bill strikes a balance between enabling the growth of Credit Unions and keeping the community focus that is at the heart of their ethos.

"I would like to thank all the representative bodies (ILCU, CUDA, CUMA and NSF) and the staff in the Registry of Credit Unions in the Central Bank for their invaluable help and support in drafting the amendments to the Bill and for their enthusiastic participation in the policy review and legislative processes from the beginning.

"I met directly with Credit Unions, their voluntary board members, their management and staff across the country and heard the practicalities and benefits that the Bill will bring in providing financial services for their Members.

"Finally, I would like to thank my colleagues in the Oireachtas for their continued participation in and contributions to the debate of this Bill.”

The proposed amendments to the legislation aim to bring about significant reforms for the credit unions sector in Ireland.

For the final stage today, the Seanad discussed all the changes to the Credit Union (Amendment) Bill since it was initiated in the Seanad. The Bill represents a very significant piece of legislation that will have far-reaching positive implications for the credit union sector in the years to come:

it will increase the flexibility around the common bond, opening up opportunities to expand membership and services
Credit Unions are now free to choose the option most suited to their member’s needs and promote growth in SME and mortgage lending, with measures including:

o Referral of members to another Credit Union with a wider product offering

o Option of loan participation and syndication

o Corporate credit unions can now be formed. These are Credit Unions whose members are other credit unions

it will empower Boards to better manage their own Governance allow them to focus and concentrate on strategy and development
it modernises and clarifies the language of the Credit Union Act and reforms a number of legacy clauses that have become obsolete
the Bill has considered coercive control and the Domestic Violence Act. That is why the Minister has introduced safeguards to the Nomination process and public access to the members list. This is critically important as it protects the most vulnerable in our society

Notes

In total 69 amendments have been made to the Bill since publication in December 2022. The majority of these are technical amendments. However, there were 4 key amendments made, listed as follows:

1. Sections 35 which allows credit unions to take part in both loan participation and loan syndication

2. Section 51A which allows credit unions to refer members to other credit unions in all circumstances, regardless of whether or not the referring credit union provides the services the member is seeking. These are important enablers in ensuring that the sector enhance member services, grow lending and expand membership

3. Section 17 will assist credit unions in modernising their membership review and approval processes. This amendment will allow each credit union board to approve new processes for membership approval and remove the need for the manual authorisation of the Membership Committee. This Committee will remain in place to deal with appeals

4. Section 36, will give credit unions greater choice and flexibility regarding loan approval processes

Significant milestone for Credit Unions

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