West Tyrone Sinn Féin -- Building an Ireland of Equals

Doherty calls for review of Credit Union proposals

Published: 7 February, 2012

The MP for West Tyrone, Pat Doherty has said that current proposals to change the way credit unions are regulated is causing a great deal of concern among its members.

The proposed changes which will effectively lower the dividend payable to members, will take effect when regulatory responsibility for credit unions in NI transfers from DETI to the Financial Services Authority (FSA) on 31st March 2012.

According to Mr Doherty 'The proposed changes will alter how credit unions are regulated and these changes are the source of much concern among members from all sections of the community.

'The FSA proposal will restrict the investment types which credit unions can invest in and reduce the maturity periods from 5 years to 1 year for the vast majority of credit unions. This would have a hugely detrimental impact on credit unions esp. in the current climate when credit unions are more reliant on the return from investments.

'By restricting the majority of credit unions to investments of 1 year maturity this will reduce the options open to credit unions and the return available.

Mr Doherty continued 'The FSA/Treasury consultation paper indicates that this proposal will result in a considerable loss of earnings for credit unions - up to £6.97 million. This will substantially reduce the dividend payable to members during these hard pressed economic times.

'The credit union movement is a valued part of our society and any threat to their services would be treated with grave concern.

He concluded 'As one of the 18 MP's for the north, I do not believe there is justification to amend the current provisions which exist for credit unions with respect to investments. Credit unions have strong liquidity positions and have at all times made prudent investments in accordance with existing regulatory requirements.

'The imposition of this requirement would be an unnecessary restriction on credit unions and their members. As such, I have written to the FSA and British Treasury to voice concern and urge them re-consider these restrictions'.