Entities other than companies
Industrial and Provident Societies /Co-operatives
Readers may be aware that in recent years the Department of Enterprise Trade & Employment (DETE) has been considering a major overhaul of the Industrial and Provident Societies Acts, the legislation which regulates co-operative societies.
In January 2022 DETE launched a Public Consultation on Reform and Modernisation of Legislation regarding Co-operative Societies. The press release regarding the consultation can be found here. There had been two previous consultations in 2009 and 2016 (click here for more details of 2016 consultation) and the 2022 consultation outlined a number of issues and asked specific questions to assist DETE prior to finalising legislative proposals, for example on audit exemption and financial statements.
Please click the link for the CCAB-I response to the consultation You can also click here to read the submissions made to DETE in February 2022 including the CCAB-I response. DETE issued a paper dated June 2022 which provides an overview of the responses received and the policy approach to the issues raised in the public consultation on proposed legislation regarding co-operative societies launched in January 2022.Readers can access a copy of the paper here .
In November 2022 the Government approved the drafting of what is billed as ground-breaking legislation for the sector. The draft legislation proposes to repeal the Industrial and Provident Societies Acts 1893-2021 and provide a modern and effective legislative framework suitable for the diverse range of organisations using the co-operative model in Ireland. Please click here for more details contained in the press release and here is a link to the General Scheme of the Co-operative Societies Bill 2022.
Please click here to be brought to an article dated January 2023 on the subject of the Co-Operative Societies Bill 2022 written by William Fry LLP solicitors. and the following link for an article dated March 2023 by Matheson LLP entitled Co-Operative Societies Bill 2022 From a Financing Perspective which looks at the provisions of the Bill relating to raising finance, providing security and registration of security.
Credit Unions
The Credit Union (Amendment) Bill 2022 was sent to the President for signature in December 2023. Click here for a government press release where the Minister for Financial Services, Insurance and Credit Unions welcomed the proposed amendments to the legislation which she said aim to bring about significant reforms for the credit unions sector in Ireland and represents a very significant piece of legislation that will have far-reaching positive implications for the credit union sector in the years to come. Also ,click for a press release of October 2023 from the Irish Dept. of Finance "Bigger and Brighter Future for Credit Unions" detailing some elements of the Bill .
The Credit Union (Amendment) Act 2023 which amends the Credit Union Act 1997 was signed into law in December 2023. Statutory instrument No. 57 of 2024 was issued on 21 February 2024 and commences the 2023 Act in phases, the first two of which are 22 February and 8 April 2024.Please click the link for an Institute news item which outlines some of the provisions of the 2023 amending legislation which may be of interest to readers including provisions relating to the accounts, board of directors and corporate credit unions.
Click the article entitled
"New era for credit unions" dated February 2023 by Gene Boyd, FCA, a risk management consultant and author of
The Governance of Credit Unions in Ireland. The article reviews the history of credit unions and the provisions of the Credit Union (Amendment) Bill 2022.
Watch the recording of an Institute webinar about new opportunities and challenges for credit unions in Ireland, a key service for communities. Author and governance expert, Gene Boyd was joined by David Malone, CEO Irish League of Credit Unions, Sean Hosford, CEO Health Services Staffs CU, and Prof Anne Marie Ward, Ulster University. The presentation was followed by a panel discussion about the challenges and opportunities for credit unions in Ireland today, particularly arising from proposed amendments to the Credit Union Act, and the recent Retail Banking Review.
In March 2023 the Central Bank of Ireland published its ninth edition of Financial Conditions of Credit Unions, 2022.Read the press release here and the report here. The report provides an update on the financial performance and position of credit unions for the financial year ended 30 September 2022. It also provides sectoral data and commentary, and aims to inform credit union boards in carrying out their strategic analysis and decision-making. Remarks by Elaine Byrne, Registrar of Credit Unions, to the CUMA 2023 Spring Conference including remarks on the report, can be read here.
Also in March 2023, the World Council of Credit Unions released its 2023 International Advocacy Sustainable Finance Report, “What Credit Unions should know about Sustainable Finance” which highlights important issues, trends, and recommendations to promote sustainability in the global financial sector. The report acknowledges the efforts by regulatory and standard-setting bodies in addressing climate-related financial risks and promoting sustainable finance, emphasizing the importance of proportionality language in regulatory frameworks and considering the unique benefits of the cooperative model of credit unions.
In September 2023 the Irish Central Bank announced new requirements for certain credit union staff undertaking particular activities to meet minimum knowledge and competence standards. These requirements are set out in the Minimum Competency Code 2017 and the Minimum Competency Regulations 2017.Click here also to read the Central Bank press release and for further links to relevant documents.
The Governor of the Central Bank addressed the Irish League of Credit Unions conference in November 2023. He spoke on a range of matters including the significant opportunity provided by the Credit Union (Amendment) Bill and of the significant opportunities which exist in relation to credit union lending. Readers can find further details here .
See also the Central Bank of Ireland December 2023 Credit Union News publication which includes a reminder to all credit unions on key financial considerations and other matters for consideration at year end including impairment reviews of assets, liquidity management, systems of control, cybersecurity and operational resilience (including outsourcing).It also highlighted the Lending Framework Review with an expectation of publishing analysis of the review in H1,2024.
Readers may also find of interest the section on the Credit Union Sector in the Central Bank of Ireland's Regulatory and Supervisory Outlook 2024 .
Clubs, Societies and Other Unincorporated Associations
Click here for a consultation by the law reform commission on Liability Of Clubs, Societies and Other Unincorporated Associations. The deadline for submissions on the consultation paper to the LRC has been extended to 15 May 2023.
Please click here for an article by Addleshaw Goddard LLP where the author Donal Dunne outlines some of the unintended consequences of the current legal position of unincorporated associations by considering two similar civil cases against unincorporated associations which led to some very different outcomes. He also considers the three alternative models for law reform proposed for consideration by the LRC which all have individual advantages and disadvantages.
By way of update on these cases please click here to read the high court decision of November 2023 Glenn Doyle vs Crumlin Boxing Club And Irish Athletic Boxing Association. There it was held as a preliminary issue in the action, that the club is not protected from being sued because of Mr Doyle’s membership, as his member status has not been established. In that case , even though the plaintiff considered himself to be a member and was treated as such by the club, he did not legally fulfil the membership criteria. He was therefore not a member and as a result, could sue the club. This is because the plaintiff was not entered on to the register of members, did not enjoy all the member benefits and did not pay a membership fee.
Please click here for an article by Mason Hayes & Curran LLP including consideration of the pros and cons of unincorporated associations and the various proposed solutions from the law reform commission.
Click here to read an examination of the issues by Tim O’Connor BL entitled “Clubs & Societies: Reform of the issue of liability, and owed to whom?”
Readers can read details of the submission by the Corporate Enforcement Authority (“CEA”) in May 2023 to the LRC. The CEA response is supportive of the proposition that detailed consideration should be given to utilising the ‘existing solution’ referred to in the Paper and extending the applicability of the Company Limited by Guarantee (‘CLG’) regime to address the issues raised with unincorporated associations.
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