“Challenging times: Learning from success and failure” Address by Registrar of Credit Unions

 Read the full speech here

• Responsible governance and management fundamental to the protection of members funds
• A movement to greater longer-term lending would have important implications for credit union balance sheet management and risk
• Member Personal Current Account Service (MPCAS) approved – further details to follow this week

In an address to the AGM of the National Supervisors’ Forum in Sligo today, the Registrar of Credit Unions, Anne Marie McKiernan, emphasised the role of Board Oversight Committee in identifying and addressing behaviours which can put member funds at risk. She said “the ‘tone from the top’ should be one where the relationship between Board and Management is the exemplar for acceptable behaviours in your credit union, one which demands that risks are prudently managed, compliance is assured, and business model weakness and threats are promptly attended to.”

In a week in which credit union governance was in the public eye, the Registrar’s comments focussed on the Registry’s expectations in this area, observing that a weak governance and control framework leaves a credit union vulnerable to threats to the safety of its members’ funds and to its viability more broadly. She stressed the Central Bank expectation that credit unions adhere to the spirit as well as the letter of all prudential requirements.

On business model development, the growth of lending in a sustainable way must remain a priority.  The Registrar went on to say “the key to achieving business model potential is in credit unions collaborating to use shared service facilities and form strategic alliances with third party service providers.” She also observed that a movement to more long term lending would necessitate an understanding of the impact this would have on the balance sheet and on risk management structures.  

The Registrar also announced the approval of the Member Personal Current Account Service (MPCAS).  She said that this represents a significant and positive development for many credit unions who wish to provide current account services and payment instruments such as debit cards to their members. Details of this service will be made available in the coming weeks.