Fresh concerns have been raised about yet more delays to the proposed legislative reform of credit unions in Northern Ireland. The Assembly heard of the possible difficulties that may arise as the consequence of an incoming Conservative Government which has stated its intention to abolish the Financial Services Authority (FSA).
The proposed reforms for Northern Ireland are based on the proviso that Credit Unions here are to to be placed under the regulation of the FSA. This in turn would allow credit unions to drastically expand the services they can offer to their members and it would also afford greater protection for those members' savings (an issue highlighted all too starkly by the Presbyterian Mutual Society collapse).
Obviously any abolition of the authority would throw these proposals into limbo.
The Minister did stress that she would press both the Treasury and the new Secretary of State on the reforms.
Showing posts with label child trust fund. Show all posts
Showing posts with label child trust fund. Show all posts
Tuesday, 11 May 2010
Tuesday, 6 April 2010
Credit Union reform in Northern Ireland
The joint HM Treasury & DETI consultation document on the reform of credit unions has recently been published:
http://www.hm-treasury.gov.uk/d/consult_ni_credit_unions.pdf
The proposals for regulatory reform follow the review of the legislative framework which was published in July 2009:
http://www.hm-treasury.gov.uk/d/review_legislativeframework_creditunions080709.pdf
The Treasury has put forward the following preferred option for reform of the sector in Northern Ireland:
The regulatory functions would transfer from DETI to the Financial Services Authority (FSA) whilst the registration of credit unions would remain within the remit of the DETI. The legislative functions would remain with the Northern Ireland Assembly.
The transfer to the FSA would enable credit unions to access both the Financial Services Compenstion Scheme (FSCS) and the Financial Ombudsmen Service (FOS). This would offer greater protection to credit union members in the event of a collapse of their credit union.
The FSCS currently provides up to £50,000 protection of savings per member in the event of a collapse.
Regulation by the FSA would also enable access to U.K Government initiatives such as the Growth Fund and Child Trust Fund.
Whilst much of the discussion has rightly focused on the FSA debate another interesting aspect of the consultation process is the scrutiny of credit unions investing their assets in their local communities.
Question 4 of the consultation document queries whether credit unions in Northern Ireland should be given powers to re-invest assets into community development and community enterprises. Such a power would go beyond that envisaged for credit unions in Britain and offer the kind of community investment powers currently enjoyed by credit unions in the ROI.
The ability to re-invest credit union assets into community enterprises could prove to be a big boost for the social economy sector in general with increased investment the result. There are numerous examples of this already occuring in the ROI to good effect and there will undoubtedly be calls for credit unions in Northern ireland to be able to wield such investment powers.
The consultation period will end on the 24 May 2010.
http://www.hm-treasury.gov.uk/d/consult_ni_credit_unions.pdf
The proposals for regulatory reform follow the review of the legislative framework which was published in July 2009:
http://www.hm-treasury.gov.uk/d/review_legislativeframework_creditunions080709.pdf
The Treasury has put forward the following preferred option for reform of the sector in Northern Ireland:
The regulatory functions would transfer from DETI to the Financial Services Authority (FSA) whilst the registration of credit unions would remain within the remit of the DETI. The legislative functions would remain with the Northern Ireland Assembly.
The transfer to the FSA would enable credit unions to access both the Financial Services Compenstion Scheme (FSCS) and the Financial Ombudsmen Service (FOS). This would offer greater protection to credit union members in the event of a collapse of their credit union.
The FSCS currently provides up to £50,000 protection of savings per member in the event of a collapse.
Regulation by the FSA would also enable access to U.K Government initiatives such as the Growth Fund and Child Trust Fund.
Whilst much of the discussion has rightly focused on the FSA debate another interesting aspect of the consultation process is the scrutiny of credit unions investing their assets in their local communities.
Question 4 of the consultation document queries whether credit unions in Northern Ireland should be given powers to re-invest assets into community development and community enterprises. Such a power would go beyond that envisaged for credit unions in Britain and offer the kind of community investment powers currently enjoyed by credit unions in the ROI.
The ability to re-invest credit union assets into community enterprises could prove to be a big boost for the social economy sector in general with increased investment the result. There are numerous examples of this already occuring in the ROI to good effect and there will undoubtedly be calls for credit unions in Northern ireland to be able to wield such investment powers.
The consultation period will end on the 24 May 2010.
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