ASUNCION, Paraguay (7/16/12)--Paraguay's government has selected the World Council of Credit Unions (WOCCU) to update the country's cooperative law and overall legal framework, including prudential norms for credit unions.
WOCCU--with funding from the Inter-American Development Bank--is working with the Instituto Nacional de Cooperativismo (INCOOP), Paraguay's regulator for cooperatives, during a five-month period to design a framework that will further protect credit union member savings and allow credit unions to better compete with other financial institutions.
Paraguay's cooperative law was established in 1994 and governs all cooperatives, regardless of their primary purpose. WOCCU's program involves a review of the 18-year-old law and INCOOP's application of it as it relates to the activity, management and operation of cooperatives.
WOCCU also will draw from its Model Law for Credit Unions publication, which was updated in 2011 and provides a sample legislative framework, as well as its corresponding Guide to International Credit Union Legislation, a compendium of credit union legislative and regulatory summaries for more than 100 countries and political provinces, and Model Regulations for Credit Unions, a matrix of regulations from 18 credit union sectors worldwide.
Paraguay's credit union association and WOCCU member, Central de Cooperativas del Área Nacional Ltda. (CENCOPAN), helped prepare the way for the current legislative initiative through its advocacy efforts on behalf of its member credit unions. A long-standing partnership with the Minnesota Credit Union Network through World Council's International Partnerships Program further aided efforts to update the country's regulatory framework.
WOCCU's program will focus on consolidating the many regulations and prudential norms, and streamlining them into Paraguay's new cooperative legal framework.
"Paraguay's credit unions have experienced impressive growth in terms of assets and operations in recent years," said Brian Branch, WOCCU president/CEO. "CENCOPAN, with support from the Minnesota Credit Union Network, has been at the forefront making sure the credit unions' socioeconomic impact in the country is understood and supported. Those efforts have laid the foundation for this initiative."
Paraguay has 47 credit unions with $718.6 million assets, according to WOCCU's 2011 Statistical Report. Credit unions hold the majority of assets among Paraguay's cooperatives, making the legislative and regulatory updates crucial to the overall strength and development of the cooperative sector. WOCCU will submit its proposed legislative and regulatory changes to INCOOP by the end of 2012.