Regulator berates credit unions over compliance

The Central Bank has berated the boards and senior managers at credit unions after a review revealed some lenders had failed to comply with regulatory controls.

The regulator now plans to write to all credit union boards and pursue a programme of improvements with the unnamed lenders which were subject to the review.

The Central Bank’s fitness and probity review investigated how well a cross-section of credit unions complied with regulations demanding that they maintain records and how well the nomination committee did its job in ensuring it monitored the fitness of professional staff to do their jobs.

With its on-site inspections focusing mainly on due diligence rules, the fitness review also found instances of “superficial” adherence.

The review was published as the President of the High Court granted permission yesterday to the joint liquidators of Rush Credit Union to sell the performing loan book of the credit union.

The Central Bank report, however, cited examples of both good and bad practises at credit unions.

“Board of directors and senior management must take steps to ensure there is an embedded and effective F&P [fitness and compliance] programme and culture operating in their credit union,” the report said.

“While some credit unions have embraced these requirements and standards, we are concerned to see that changes in governance culture are taking so long to embed in other credit unions.”

The regime, which was brought in in as long ago as 2013, has applied to all credit unions from last August.

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