Central Bank consults on application of Minimum Competency Rules to Credit Unions

• Minimum Competency Standards are an important part of the framework to protect consumers
• Consultation on extension of Standards to credit union core services
• Significant benefits in terms of further strengthening the quality of the service provided to members

The Central Bank of Ireland has today (19 January 2022) commenced a public consultation on the application of the Minimum Competency Code 2017 and the Minimum Competency Regulations 2017 to credit union core services.

The minimum competency standards were first introduced by the Central Bank on 1 January 2007 and established minimum professional standards for staff of financial service providers with particular emphasis on staff dealing with consumers in relation to retail financial products.

Currently the standards only apply to credit unions when acting as retail intermediaries, providing mortgage credit agreements in line with the knowledge and competence requirements of the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, and devising or creating mortgage credit products.

The Central Bank is now proposing to extend the minimum competency requirements to other credit union activities, such as lending and deposits.

Registrar of Credit Unions, Patrick Casey said: “Strong, well-governed credit unions are an important part of the financial services landscape, serving the needs of the people of Ireland and the wider Irish economy.

“Credit unions need to embrace the process of innovative business model change and it’s important that their business models continue to be aligned with competence and capability. Our aim is to ensure that consumers have the same level of protection no matter where they source their financial services.

“We acknowledge the work the credit union sector has done to elevate standards and to increase knowledge and competence in the sector through training and ongoing continuing professional development. Around two-thirds of credit union staff already hold relevant qualifications. These are positive actions that the Central Bank wishes to recognise, support and encourage through this proposal.

“It is expected that the expansion of the scope of the Minimum Competency Code to credit union core services will bring significant benefits in terms of further strengthening the quality of the service provided to consumers while also maintaining member confidence in the sector.”

The consultation is open until 19 April 2022 and responses can be submitted to [email protected]

Notes

In 2016, the Central Bank reviewed the Minimum Competency Code 2011, which resulted in the publication of the Minimum Competency Code and the Minimum Competency Regulations. The Central Bank proposed extending these requirements to apply to the core services of credit unions, such as lending and term deposits, in order to ensure the same level of protection in the area of competence for consumers regardless of the type of entity they are dealing with. Following the submissions, the project was deferred pending further work.

In 2021, the Central Bank issued a questionnaire to 224 credit unions to assess the level of qualification in the credit union sector. The findings revealed that about two-thirds of credit union staff hold relevant qualifications.

Consultation Paper 147: Application of the Minimum Competency Code 2017 and the Minimum Competency Regulations 2017 to credit union core services.

Minimum Competency Code and Minimum Competency Regulations 2017.