Treacy Makes Order Bringing Certain Provisions of the Credit Union Act, 1997 into Operation'Potential exists for the local credit union to become a one-stop-shop for financial services'

Mr Noel Treacy, T.D., Minister for Science, Technology and Commerce, announced today (Tuesday 31st July 2001) that he has made an Order commencing certain provisions of the Credit Union Act, 1997 with effect from 1st August, 2001.

The main purpose of making the Order is to allow credit unions to provide additional services to their members.

Under the Credit Union Act, 1997, credit unions are allowed to take deposits from, and make loans to, their members. With the commencement of the new provisions of the Credit Union Act, 1997, credit unions may provide additional services to their members, subject to approval by the Registrar of Friendly Societies, Mr Martin Sisk.

The commencement of these provisions will allow credit unions to develop the range of services which they offer to their members. These could include, for example, ATM cards, insurance services, investment advice and the provision of Personal Retirement Savings Accounts.

Minister Treacy said "With the introduction of these new services greater potential exists for the local credit union to become a one-stop-shop for financial services to their members in the coming years".

"The introduction of the new provisions will also require credit unions to have an insurance policy to insure them against loss suffered or liability incurred by reason of fraud or other dishonesty of its officers or voluntary assistants," Minister Treacy added.

The introduction of the new provisions will also allow credit unions to participate in a savings protection scheme, which is approved by the Registrar of Friendly Societies. Most credit unions, who are members of the Irish League of Credit Unions already participate in a savings protection scheme. The main purpose of this provision is to give the Registrar sufficient powers to deal with the development of suitable and adequate savings protection schemes for those credit unions which are not members of the Irish League of Credit Unions.

Under the Ministerial Order, sections 46 to 52 of the Credit Union Act, 1997 have been commenced with effect from 1 August 2001.

Sections 48 to52 of the Credit Union Act, 1997 provide for the implementation by credit unions of additional services on approval of the Registrar of Friendly Societies.

Section 46 of the Credit Union Act, 1997 provides that credit unions may participate in a savings protection scheme, which is approved the Registrar of Friendly Societies. The main purpose of section 46 is to give the Registrar sufficient powers to deal with the development of suitable and adequate savings protection schemes for those credit unions which are not members of the League of Credit Unions and which do not accordingly enjoy the protection afforded by the League’s own savings protection scheme.

Section 47 requires credit unions to have in force, an insurance policy that insures them against loss suffered or liability incurred by reason of fraud or other dishonesty of its officers or voluntary assistants. It will be an offence for a credit union not to comply with this requirement.

The Minister for Social, Community and Family Affairs recently published the Pension Bill, 2001 which, when enacted, will provide for the introduction of the new Personal Retirement Savings Accounts (PRSAs). Credit unions will require to be licensed by the Pensions Board if they wish to offer PRSAs.