DUBLIN, Ire. (12/31/12)--Ireland's credit unions will start off the New Year facing significant changes, a result of new reforms in the Credit Union and Cooperation with Overseas Regulators Act 2012, enacted earlier this month.
The new law encompasses more than 60 recommendations made by the Commission on Credit Unions last March and clears the way for the government to earmark US$331 million to the Credit Union Fund mandated by the law to help shore up the credit union sector and support restructuring (Tax-News.com Dec. 28 and The Irish Times Dec. 27).
The reforms involve four broad areas: prudential regulation (including reserves, liquidity, lending and investments); governance (including limiting directors' terms to 12 years in aggregate for any 15 year period); restructuring and stabilization overseen by a new Restructuring Board; and support of viable but undercapitalized credit unions.
It is Ireland's first major overhaul of credit union legislation in 15 years, said Finance Minister Michael Noonan, who added the government is making a key investment in the future of the credit union movement there.
Canadian Bobby McVeigh is heading the Credit Union Restructuring Board, which will have a lifespan of about three years. Its function will be to oversee mergers or closures. Some have said that mergers could cut the number of credit unions from 400 to 200, said the Times. The mergers are meant to be voluntary and incentivized, said Tax-News.com.
The Irish Credit Union League has been supported of the restructuring (News Now April 19).