Registrar of Credit Unions address to the Irish League of Credit Unions’ AGM

• Clarity of vision and strategy key to future sustainability grounded in members’ needs; Fragmented approach by credit unions in seeking to transform their business models.
• Regulatory supports to credit unions provided through supervisory proportionality, regulatory responsiveness and earned flexibility
• Creation of new Credit Union Workshops designed to support credit unions of differing sizes in addressing key risk vulnerabilities to strengthen their core foundations

Read the full speech

Registrar of Credit Unions, Patrick Casey, addresses today’s Irish League of Credit Unions’ AGM in Killarney.

Mr Casey observed how credit union’s highly respected brand and member trust and loyalty was a competitive difference on which to build their business. In his comments on renewing and reinvigorating the business model, Mr. Casey noted the importance for the sector to embrace a broader coherent vision and strategy for the future. He emphasised the need for sector advocacy to move beyond requesting one-off changes to the regulatory framework to a more broad based consideration of business model and balance sheet transformation. This would support necessary product and service development and multi-channel delivery.    

Mr. Casey highlighted how the Central Bank supports business model evolution through its supervisory proportionality, its earned flexibility approach and regulatory responsiveness, designed to assist credit unions in prudently transitioning their business model to better serve member needs into the future.

Referencing the Central Bank’s vision of “Strong Credit Unions in Safe Hands” to support sector sustainability, he cited four important elements within the Central Bank’s approach for 2018:

• a refinement of its supervisory approach to support credit unions in their strengthening of core foundations to enable business model development and to address viability issues as early as possible;
• a review of sectoral lending designed towards accommodating the future lending growth ambitions of stronger credit unions as part of a balanced loan portfolio;
• a new CEO Forum aimed at supporting the advancement of the credit union business model development agenda; and
• ·new Credit Union Workshops, aimed at supporting credit unions of differing sizes in addressing key risk vulnerabilities, and by extension, strengthening their core foundations.

Mr Casey concluded by saying:

“We emphasise that the business model agenda should not be solely focused on individual product or services or one-off changes to the regulatory framework, but requires a more broad based approach embracing the necessary balance sheet transformation, cost management initiatives, process efficiencies and collective arrangements. 

In your deliberations on your conference theme of Reflecting, Renewing and Reinvigorating, we urge you to take the opportunity to undertake a broader coherent sectoral assessment of the future credit union business model(s). This should help you to clarify your future vision and necessary enabling strategies, to deliver sustainability for all your members.”

Notes

• Supervisory proportionality is designed to strengthen credit union core foundations in credit unions of all sizes, to enable business model development and to address viability issues as early as possible;
• Earned flexibility where strong credit unions with the required governance, risk and operational capabilities, can seek necessary approvals for new products and services not specifically provided for under existing Credit Union legislation; and
• Regulatory responsiveness can ensure that the credit union regulatory framework remains tailored and proportionate, and that it continues to evolve in a responsive manner to support business model development – as evidenced for example by recent changes to facilitate investment by credit unions in social housing.