The Central Bank confirmed on Thursday that it is proceeding with a plan to impose minimum knowledge and competence requirements on certain staff in credit unions, including those involved in lending and taking deposits, from next year.
The move will bring credit unions into line with other financial service firms under the regulator’s Minimum Competency Code 2017.
Currently, the standards only apply to credit unions when acting as retail intermediaries, providing mortgage credit agreements.
The move will also bring certain senior staff of credit unions into the Central Bank’s fitness and probity regime, which applies across the wider financial sector.
The minimum competency changes will come into effect in October 2024, with a four-year transition period until October 1st, 2028. The fitness and probity changes will be effective from October next year.
Credit union staff who are currently working in areas that will be subject to the new requirements can avail of transitional arrangements to comply with the standards and obtain relevant qualifications, the regulator said.
“These new rules introduce further enhancements to our consumer protection framework for credit unions. They reflect the importance of credit unions in Irish daily life, and the sector’s commitment to their members is demonstrated by the fact that many credit union staff already meet these standards,” said Gerry Cross, director of financial regulation in the areas of policy and risk.
“Applying these requirements to credit unions will help to build on the existing high levels of knowledge and expertise in the sector. This will further strengthen the quality of the service provided to credit union members and underpin the current evolution in credit union business models.”
The Central Bank eased some of its lending restrictions in early 2020 to allow credit unions to engage in more longer-term lending, including home mortgages and business lending.
Draft legislation aimed at enabling credit unions to co-lend and collaborate more is working its way through the Oireachtas. If enacted, the Credit Union (Amendment) Bill 2022, would enable credit unions for the first time to refer members to other credit unions if they do not offer a particular product themselves – and to participate in loans of other credit unions.