07 January 2019 Press Release
- Central Bank welcomes today’s publication of the Credit Union Advisory Committee Implementation Group Report and the opportunity to consider the matters raised.
- Work already underway in respect of the credit union lending framework, sector communications and engagement and business model development.
- Credit unions with strong prudential foundations of governance, risk management and operational capability, better placed to achieve a sustainable business model and serve members’ needs into the future.
The Central Bank notes the publication today of the report of the Credit Union Advisory Committee (CUAC) Implementation Group. The Central Bank was pleased to participate in the group by providing input on regulatory and supervisory matters concerning credit unions1.
Commenting on the report, Registrar of Credit Unions, Patrick Casey said:
“The Central Bank welcomes the publication of the CUAC Implementation Group Report. In delivering on our strategic priorities during 2018, significant progress has already been made by the Central Bank in key areas such as the review of the credit union lending framework, enhanced communications and engagement, and in applying a proportionate approach to supervision and the development of new regulations.
We remain committed to working with credit unions and sector stakeholders to ensure a responsive regulatory framework which facilitates prudent development of the sector.”
The Central Bank will review the report, particularly the recommended next steps on items relating to regulation and supervision of credit unions. Following the publication of the CUAC Report in 2016, the Central Bank is progressing a number of related recommendations concerning the following:
- The lending framework was a key focus for the Central Bank during 2018 with the publication on 24 October 2018 of a Consultation Paper (CP125) on proposed changes. This consultation is open for industry feedback until 9 January 2019, following which we will review submissions, engage with sector stakeholders and issue regulations for changes to the lending framework for credit unions.
- On communication and engagement with the credit union sector, during 2018 we continued to develop and enhance this area by introducing new initiatives including Credit Union Workshops for Directors and the independently chaired CEO Forum on Business Model Development to facilitate strategic coherence in business model development, and to provide a constructive environment for CEOs to foster collaboration.
- On tiered regulation, the Central Bank has already adopted a proportionate approach in developing new regulations for the credit union sector. In addition, we deploy our supervisory strategy on a proportionate basis towards credit unions through supervisory proportionality, reflecting the nature, scale and complexity of individual credit unions.
Following the publication of the Credit Union Advisory Committee (CUAC) Report in July 2016, the CUAC Implementation Group (IG) was established by the Department of Finance. The IG was chaired by Department of Finance and comprised of one member from each of the credit union sector representative bodies/associations, the Central Bank and CUAC. The implementation group was tasked with:
- Implementing each recommendation within CUAC’s 2016 Report in a cohesive manner;
- Monitoring progress of implementation of those recommendations; and
- Providing regular updates to the Minister for Finance.
The Implementation Group was not tasked with addressing legislative or regulatory issues facing the sector other than those recommended in CUAC’s report, namely:
- Tiered Regulation
- Consultation and Engagement
- Business Model Development
- CUAC Reports on Interest Rate Ceiling, AGM Voting and Common Bond.
1 The Central Bank’s representation in the Implementation Group reflects our statutory mandate towards credit unions as independent prudential regulator and supervisor. As indicated in the report, the Report is not intended to bind the Department of Finance, the Central Bank or any other members of the Implementation Group in advance of any consultation carried out by the Central Bank or any other legislative process commenced by Government. The independent status of the Central Bank is recognised.