The Credit Union (Amendment) Act 2023 ("2023 Act") was signed into law in December 2023 and is being commenced in phases. See statutory instrument No. 57 of 2024.
Below we set out some provisions of the amending legislation which may be of interest to our members.
Provisions relating to the accounts.
The requirement that the annual accounts be signed by a member of the board oversight committee is removed and they are to be signed by the manager of the credit union and member of the board of directors acting on behalf of the board (commences 8 April 2024).
Section 6 of Credit Union Act 1997 ("1997 Act") is amended in relation to common bond provisions. It now provides that where a credit union has no website, the credit union must include in its annual accounts a description of the common bond or where the common bond is or includes “residing or being employed in a particular locality “a map on which the locality concerned is marked (commences 8 April 2024).
Some changes are made to allow for electronic delivery of information including a provision permitting electronic delivery of notice of general meetings to the auditor and a new provision 188A has been added allowing distribution, subject to the conditions in the new section, of information including annual accounts by electronic means (both commence 22 February 2024).
Board of directors
Changes are made in relation to the board of directors of a credit union including one whereby a credit union manager can be appointed to the board of directors (new section 63A added to 1997 Act and commences 8 April 2024).
Environmental social and governance policy has now been included as a policy for the board to approve, review and update at least every 3 years. This is by virtue of an amendment to section 55 of the 1997 Act where the board has obligations to approve review and update plans policies and procedures. These obligations were annual but with the commencement of the 2023 Act the obligation will be every 3 years (no commencement date yet).
There will be a requirement for the credit union to consider gender in the identification of prospective candidates for appointment to the board of directors (commences 8 April 2024).
The provision for approval of expenses is changed from requiring approval of a majority of the board of directors to approval by at least 2 directors (excluding a director whose expenses are to be included) (commences 8 April 2024).
In section 32 of the 1997 Act which deals with restrictions on withdrawal of shares/deposits, a change is made whereby a decision (about withdrawing savings) does not have to be mandatorily approved by the board (commences 8 April 2024).
There are changes to the provisions on approval of loans in section 36 of the 1997 Act. The approval of two thirds of the special committee is deleted and approval of the board of directors is substituted (commences 8 April 2024).
Corporate credit unions
The 2023 Act provides for existence of corporate credit unions. New provisions have amended section 6 of the 1997 Act. A new schedule 6 is now included in 1997 Act setting out matters to be provided for in the rules of a corporate credit union including provision for the audit of accounts by one or more auditors appointed by the credit union. This is consistent with the requirements for non-corporate credit unions.
By amendment of section 81 of the 1997 Act, the quorum for general meetings of corporate credit unions is two members.
There is no commencement date yet for the provisions for corporate credit unions.
Other changes
Section 35 of the 1997 Act is amended so that a credit union can now agree to participate in a loan to a member of another credit union (the amendments are partially commenced on 8 April 2024).
Section 38 of the 1997 Act is amended so that on commencement of the provisions of the 2023 Act, the maximum interest rate that may be charged on loans made by a credit union to its members will be set by the Minister (for Finance) (commences 8 April 2024).
Under the 2023 Act, the form of the annual compliance statement a credit union has to make to the Central Bank of Ireland (CBI) can be prescribed by CBI (commences 8 April 2024).
This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.
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