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The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., has today, (Monday) published the Final Report of the Credit Union Advisory Committee (CUAC) Report Implementation Group.

• Following the CUAC Review of Implementation of the Recommendations in the Commission on Credit Unions in June 2016, an Implementation Group was established in order to oversee the implementation of the recommendations put forward in the CUAC report.
• The Implementation Group met 18 times between February 2017 and December 2018 and worked through each of the CUAC recommendations, prioritising work on Recommendation 2 (Lending) and Recommendation 3(a) (Consultation and Engagement) during 2017.
• On completing its term in December 2018, the Implementation Group produced a Final Report, which is being published today. The Final Report summarises the work of the Implementation Group, and highlights developments taking place in the Sector.

Commenting on the Final Report, Minister Paschal Donohoe T.D. remarked: ‘I welcome the Final Report of the Implementation Group and wish to thank them for their work in progressing the CUAC recommendations. I note the many changes that have taken place since the CUAC report and welcome the variety of shared services initiatives emerging from the sector. I believe it is key for Credit Unions to collaborate effectively though such shared service structures to ensure they can provide more services to their members in a timely and cost effective manner’.

“I note that the Final Report contains a number of recommended actions which are the responsibility of my Department. While I will consider the majority of these recommendations in due course, I have asked my officials to begin preparations to make the legislative amendments required to raise the Credit Union interest rate cap from 1% per month to 2% per month, as recommended in the report and previously recommended by CUAC. This proposal will then be brought to Cabinet as part of the legislative process’.

“Of the recommended actions which are the responsibility of the Central Bank, I note that work is progressing on the Review of the Lending Framework for Credit Unions, which is currently under consultation. Review of the Lending Regulations is an important matter and one for which I have previously outlined my support.”
The Minister concluded by saying: ‘2019 should be a successful year for Credit Unions and I welcome the many developments taking place and which are outlined in the Final Report. Should these projects be realised, the sector will materially expand the services being provided to Credit Union members. The Government recognises the important role played by Credit Unions as co-operative, not-for-profit financial services providers and as such I am strongly supportive of a strengthened and growing Credit Union movement. I would encourage Credit Unions to continue to develop their business models, while looking to further provide for both their members and their common bonds, and further fulfil their important role in society.”

Notes for Editors

Members of the CUAC Report Implementation Group
The Implementation Group was chaired by the Department and consisted of one member from each of the Credit Union representative bodies – the Irish League of Credit Unions, the Credit Union Development Association, the Credit Union Managers' Association, and the National Supervisors Forum – along with one member from the CUAC and a member from the Central Bank.

Purpose of CUAC Report Implementation Group
The Implementation Group was established on foot of the CUAC Review of the Recommendations in the Commission on Credit Unions Report in order to:
1. Implement each recommendation within CUAC’s Report in a cohesive manner;
2. Monitor progress of implementation of those recommendations; and
Provide regular updates to the Minister for Finance.
In carrying out these tasks, the Implementation Group will have regard to the impact of the recommendations on Credit Unions.
The Implementation Group was not tasked with addressing legislative or regulatory issues facing the sector other than those recommended in CUAC’s Report, namely:
1. Tiered Regulation
2. Lending
3. Consultation and Engagement
4. Governance
5. Restructuring
6. Business Model Development
7. CUAC Reports on Interest Rate Ceiling, AGM Voting and Common Bond.
Outline of the Final Report

The Final Report summarises the work and views of the Implementation Group regarding the CUAC’s recommendations. It also provides some contextual analysis of recent developments since the CUAC report as well as forward looking views on forthcoming progress in the sector and emerging issues and challenges.
The section on developments since the CUAC report outlines the many changes in the interim between the two reports, with developments in the Regulatory and Supervisory space as well as many positive shared services initiates emerging from the sector. This section also outlines the financial situation facing the sector and the challenges this poses.
The Final Report also sets out the many positive developments in train with a ‘2019 Roadmap’, which points to the material regulatory changes that are either bedding in or due to come into effect over the short term and the imminent expansion of services and products for a large cohort of Credit Unions. As this section points out, 2019 could be an important year for the Credit Union movement.
Notwithstanding this, there are emerging issues and challenges facing the sector which are summarised in the penultimate section of the Final Report.

What was the Commission on Credit Unions, and what was the CUAC Report?
The Government established the Commission on Credit Unions on 31 May 2011 to review the future of the Credit Union movement and to make recommendations as to the most effective regulatory structure for Credit Unions, taking into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect members’ savings and financial stability. The Final Report of the Commission on Credit Unions was presented to the then Minister for Finance on 31 March 2012.
The CUAC Report fulfilled a Programme for Partnership Government commitment to conduct a review, and report by the end of June 2016, on the implementation of the recommendations outlined in the Report of the Commission on Credit Unions. The CUAC Report identified recommendations made by the Commission on Credit Unions and examined their implementation, having regard to their impact on Credit Unions, and environmental changes that have occurred following publication of the Commission on Credit Unions Report. The report also took account of the spirit/intention of the Commission, the not-for-profit mandate of Credit Unions and their volunteer ethos and community focus, while giving due regard to the need to fully protect members’ savings and financial stability. The need for Credit Unions to develop their business models and grow income in a prudent manner was also considered.

Relevant Documents
Report of the Commission on Credit Unions
Review of the Recommendations in the Commission on Credit Unions Report
Credit Union Advisory Committee Policy Paper Publications