A credit union is a financial co-operative formed for the promotion of thrift among its members by:
- the accumulation of their savings
- the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest
- the use and control of members` savings for their mutual benefit.
The Registry of Credit Unions (RCU) is responsible for the registration, regulation and supervision of credit unions.
In recognition of the unique nature of credit unions, a statutory position of Registrar of Credit Unions was explicitly created within the Central Bank of Ireland to assume responsibility for the regulation of credit unions.
Under the Credit Union Act 1997, (" the 1997 Act") the functions of the Registrar of Credit Unions are to regulate credit unions with a view to the:
- Protection by each credit union of the funds of its members; and the
- Maintenance of the financial stability and wellbeing of credit unions generally.
RCU`s aim is to promote a financially stable credit union sector that operates in a transparent and fair manner and safeguards its members` funds. RCU uses a combination of off-site analysis and on-site inspections in carrying out the regulatory process.
Credit unions are regulated under the 1997 Act.
New Regulatory Framework
The Commission on Credit Unions ( "the Commission") made a number of recommendations regarding the strengthening of the regulatory framework for credit unions including more effective governance and regulatory requirements. Many of these recommendations have been reflected in the Credit Union and Co-operation with Overseas Regulators Act 2012 ("the 2012 Act").
The Commission also made recommendations in relation to the application of Fitness and Probity to credit unions. The Fitness and Probity regime for credit unions is being introduced on a phased basis and will be fully implemented by 1 August 2016. Details on the Fitness and Probity regime for credit unions, including those that are also authorised as retail intermediaries,are provided in the Fitness and Probity – Credit Unions section of the website.
In January 2016 the Central Bank introduced regulations for credit unions which cover a number of areas including reserves, liquidity, investments, savings and borrowing and build upon existing prudential and governance requirements.
In order to assist credit unions with the implementation of the new strengthened regulatory framework the Central Bank has developed a Credit Union Handbook. Further details on the Credit Union Handbook are provided in the Credit Union Handbook section of the web-site.
The Central Bank is committed to having clear, open and transparent engagement with stakeholders in fulfilling its financial regulation and supervisory objectives.
This Consultation Protocol for Credit Unions sets out how the Central Bank proposes to consult formally with credit unions, their representative bodies and other relevant stakeholders prior to the introduction of new regulations for credit unions.