Regulator Credit unions are now regulated by the Central Bank. Originally they were regulated by the Registrar of Friendly Societies. The 2003 plus 2004 reforms place the registrar of credit unions under the umbrella of the financial regulator. It is now under the umbrella of the Central Bank under the 2010 reform. The Registrar of Credit Unions regulates credit unions on behalf of the Central […]
Background A credit union is, in principle, a voluntary organization run for the benefit of its members rather than for profit. Credit unions initially developed in Ireland as agricultural-based land banks. Land banks fated away in the 1930s. The first modern credit union commenced operations in the late 1950s. At that time, credit unions were governed as industrial and provident societies. Following a government-appointed committee’s […]
Board of Directors Each credit union must have a Board of Directors which has responsibility for the control direction of its affairs funds and records. They are elected by secret ballot by the members. The directors have a range of powers and responsibilities, including key decision-making, recommending dividends, fixing interest rates, fixing maximum loans, decisions on investment borrowing, AGM matters, and submission of accounts for […]
Other Services 1997 Act Credit unions may provide additional services for members in accordance with ministerial regulations. Formerly, the registrar may approve additional services being provided. The application was made to the registrar for the approval of the provision of different services. Credit unions may not offer loans on terms of other services or provide linked services. There is a right of appeal to the […]
Taking Shares The subscription for credit union shares is the basic method of saving. Shares in credit unions do not have the characteristics of company shares. They may not be preference shares. Bonus shares may be issued from reserves, but statutory reserves may not be used for this purpose. There are no share certificates as such Passbooks and records show the value of shares and […]
Restructuring Board The Credit Union Restructuring Board was established under the 2012 Act. The function of the Board includes developing provisional proposals and plans for restructuring in the credit union sector, assisting credit unions in the preparation of restructuring plans, considering and assessing restructuring plans submitted by credit unions, approving conditionally or unconditionally or objecting to restructuring plans, advising the Central Bank of its recommendations […]
Strategic & Risk Management The board of directors must prepare a strategic plan setting out the strategy and objectives of the credit union. The board must ensure that the credit union has the resources, both financial and otherwise, to undertake the activities provided for in the plan. A credit union must develop and maintain a risk management system to allow it to identify and manage […]
Terms of Loans 1997 Legislation The 1997 legislation capped loans at the greater of £30,000 or 1.5% of the total assets of the credit union. The limits may be adjusted by ministerial order.Loans may be made to members only. They may be secured or unsecured. Security may be by way of a guarantee, pledge of shares, deposits, insurance policy, or real property security. Terms and […]
Revised Prudential The Credit Union Act 2012 amended the regulatory framework for certain prudential requirements for credit unions. It made significant amendments regarding the governance of credit unions, stemming from the financial crisis that left many credit unions oversized and insolvent. It amends governance and provides for the separation of functions of the management and the board of directors. It also establishes a stabilization mechanism […]
Directors A credit union must have a board of directors responsible for its general control and management. The board should be sufficiently sized and possess adequate expertise to carry out its role effectively. Specific requirements are detailed regarding the composition of the board, including maximum and minimum numbers of directors (from 7 to 11), stipulating an odd number. Directors are mandated to dedicate certain time […]