New Zealand preps for new credit union law
Co-op Money NZ is fully backing the new initiative
A new law in New Zealand is being readied with plans to bring in more innovation and accountability to credit unions.
Called the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill, the new legislation will update the law for credit unions and their associations. It has been read for the first time in Parliament.
13 credit unions operate in New Zealand with 190,000 members. Co-op Money NZ operates the nation’s largest ATM payment switch with 900 machines.
Co-op Money NZ, the industry body for the country’s credit unions and mutual building societies, says it is fully backing the new initiative.
According to the chair of Co-op Money NZ, Dr Claire Matthews, New Zealand is currently the only jurisdiction where credit unions don’t have their own legal form.
Matthews says: “The existing legislation is 35 years old and has not kept up with rapid changes in the financial services and payments industry.”
Stuart Smith, MP for Kaikoura, introduced the Member’s Bill and it was supported across the House by all parties who spoke and was given its first reading unopposed. The Bill, including issues raised by credit unions, will now be considered by the Finance and Expenditure Select Committee.
The changes under consideration include bringing credit unions into alignment with other financial service providers; removing unnecessary compliance costs; and promoting innovation and accountability.
The Bill also includes provisions for credit unions to become bodies corporate under the Act; and credit unions to provide financing to SMEs.
Under the Bill credit unions and their boards would remain subject to the existing legal and regulatory requirements under the Reserve Bank of New Zealand, financial markets, financial reporting and taxation legislation.
