Seán Fleming

The Credit Union (Amendment) Bill 2022 is the first substantive credit union legislation since 2012, which followed the Commission on Credit Unions.

The bill will create corporate credit unions as an additional regulated vehicle through which credit unions could collaborate. It will also amend section 43 of the 2012 Act to clarify that credit unions can invest in ventures supporting credit unions.

It will also seek to improve members’ services by allowing credit unions to refer members to other credit unions and to participate in loans of other credit unions.

The bill will also amend section 38 of the 2012 Act to allow the minister for finance to set a maximum interest rate, currently fixed at one per cent per month. This is intended to provide more flexibility for credit unions to price risk in a rising interest rate environment.

There are also a number of provisions aimed at facilitating a greater focus on strategic planning and redressing the balance of responsibility on the board between directors and management.

These provisions include the option of making the manager a member of the board; reducing the minimum number of board meetings to six per annum; reduing the frequency of review of policies; and reducing the number of administrative issues to be mandatorily approved by the board.

Seán Fleming, minister of state with responsibility for financial services, credit unions and insurance, said: “The local credit union and the role it plays in the economy and in the community is more important now than ever before.

“The government wants credit unions to develop a wider range of products, with greater accessibility.

“This legislation will enable greater collaboration through the ability to establish corporate credit unions. It will enable wider availability of products across the movement through changes to the common bond. It will give credit union boards a greater focus on strategic issues, through practical governance changes.

“A strong, resilient and collaborative credit union movement can take advantage of the opportunity afforded by banks withdrawing from Ireland and from branch closures. This legislation will help the credit union movement to grow as a key provider of community banking in the country.

“To help credit unions seize this opportunity, it is the government’s priority to have this bill passed by the Houses of Oireachtas as soon as possible.”