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At WOCCUs behest Polands president opposes CU bill
WARSAW, Poland (12/4/09)--Poland President Lech Kaczynski filed an application Monday with Poland’s Constitutional Court to examine the legality of a new bill that would affect the way Polish credit unions, or SKOKs, are supervised. The World Council of Credit Unions (WOCCU) opposes the bill, saying it could weaken SKOKs. The proposed act would limit credit unions’ business powers and require them to pay income taxes. It also dismantles the existing mandatory deposit stabilization fund of Polish credit unions by eliminating the sector’s supervisory capacity, and does not offer credit unions complimentary access to the Banking Guarantee Fund, according to WOCCU. In filing an application with the court, Kaczynski is questioning the legislative nature in which the act was passed, the possible interference in Polish credit unions’ autonomy, and the limited time credit unions are given under the new law to comply with new capital requirements and other provisions. “Such actions bring an unnecessary level of risk to Polish depositors and are in contradiction to European Union regulations for mandatory deposit insurance,” said David Grace, WOCCU vice president of association services, in a letter to Kaczynski. Under the act, credit unions also would have to meet new capital standards within nine months of the bill’s enactment. The capital requirement was not preceded by a thorough analysis of the current financial situation of credit unions by its supervisor, the National Association of Cooperative Savings and Credit Unions (NACSCU), WOCCU added. NACSCU is WOCCU’s member organization in Poland, headed by Grzegorz Bierecki. WOCCU also noted that the act does not follow the recommendations of the G-20 Leaders Summit in London in March. The G-20 recommends that nonsystemically important financial institutions could be subject to some form of registration requirement or oversight, depending on the type and degree of risk posed. Polish credit unions serve two million households, but hold only 1.1% of the bank sector assets and are not the type of institution that the G-20 was concerned about in its recommendation, WOCCU said. Dame Pauline Green, co-president of Cooperatives Europe, also opposes the legislation. “The new law on credit unions in its approved form violates the independence of the cooperatives, ignores the autonomy of the sector, abandons not-for-profit principle and last but not least, does not eliminate the existing fiscal discrimination of the credit unions against the commercial banking sector,” Green wrote in a letter to Kaczynski. The Polish credit union system is the second largest financial system in Poland, said Brian Branch, WOCCU executive vice president and chief operating officer. “During the financial crisis, the Polish credit unions maintained the strongest prudential financial standards and continued to provide credit services to Polish citizens when credit was not available from other financial institutions,” Branch said.
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