Credit unions 'should have a standalone regulator'
CREDIT unions should have an independent regulator separate from the new Central Banking Commission, the Irish League of Credit Unions told TDs and senators yesterday.
The league's president, Mark Bailey, said new regulatory structures that are to be put in place to address lending excesses by banks will have an adverse effect on credit unions.
He told the joint Oireachtas Committee on Economic Regulatory Affairs: "Our main concern is that the regulation of credit unions will be excessive, disproportionate and appr-oached on the basis that 'one size fits all' in the measures which will be applied to every institution involved in the provision of financial services."
Mr Bailey added that credit unions feared they would be "tainted by a regulatory response proportionate to the excesses and inadequacies in how banks and building societies operated, without due consideration of its suitability or otherwise for credit unions".
The registrar of credit unions, or the regulator of the movement, is part of the Financial Regulator. But the Central Bank and the Financial Regulator are due to be merged into a new Central Banking Commission.
Fianna Fail TD Sean Ardagh said that with combined assets of €13.9bn, credit unions required very definite regulation and he wanted to see the Department of Finance continue to have a role.
Fine Gael's Kieran O'Donnell questioned some of the investment decisions made by credit unions, which meant that they experienced large losses.
Kevin Johnson, CEO of the rival credit union body, the Credit Union Development Association, said CUDA and its member credit unions strongly supported the need for a differentiated approach to regulation but believed that this should be part of the new Central Bank Commission/Department of Finance structure.
A spokeswoman from the Financial Regulator said: "The protection of members' savings must take precedence over all other aims and objectives of credit unions and we would expect that diligent boards and management would take the same view.
"Compliance will continue to be a key focus of our regulatory oversight."