The Central Bank is to introduce its fitness and probity regime for credit unions this August with the initial phase to cover those with assets of more than €10 million.
It said the move was designed to improve governance standards at board and management level. The regime will be introduced on a phased basis to allow time for the implementation of internal controls and procedures in compliance with the new regulations, provided for in the Credit Union and Co-operation with Overseas Regulators Act 2012.
It will essentially conduct background checks on people with senior roles evaluating their fitness to practice. This process will look for a variety of scenarios including previous convictions, conflicts of interest and bankruptcy although each will be assessed on a case by case basis.
Phase one, to be introduced on August 1st, will apply to those credit unions with larger assets during which time existing and new officers in pre-approval controlled functions will become subject to the new regulations.
Regulations
New appointments to controlled functions will be subject to regulations and standards from November while all officers in existing controlled functions will be compliant by August, 2014.
Finally, from August 2015, all existing credit unions will be brought in line.
Sharon Donnery, registrar of credit unions, said: "The introduction of a fitness and probity regime for credit unions will help improve governance standards at board and management levels and will compliment the new governance framework for credit unions."
The move comes on foot of the publication of the Credit Union Act 2012 published last November. The Central Bank has been keen to regulate the sector which by the end of last year was facing arrears of €1 billion.
The Central Banks said: "A key goal of the introduction of the fitness and probity regime for credit unions is to ensure that persons that exercise significant influence and control in a credit union are capable, competent and financially sound persons with the appropriate skills, experience, knowledge and integrity to manage and govern the credit union for the benefit of all stakeholders."
