Minister for Finance fixes date to bring Part 3 of the Central Bank Reform Act 2010, relating to fitness and probity, into operation for credit unions.
The Minister for Finance, Mr. Michael Noonan, TD, has signed an Order bringing Part 3 of the Central Bank Reform Act 2010, as it applies to and in relation to credit unions, into operation from 24th September 2012. From that date, the Central Bank of Ireland will have powers to set out Regulations and a Code of Fitness and Probity for credit unions.
The Central Bank intends to introduce the new standards on a phased basis and consultation with the sector on the implementation approach is due to begin by the end of 2012.
The Commission on Credit Unions dealt at length with the Governance Standard to be introduced for credit unions and its Report made clear recommendations on the roles and responsibilities of the chair, board and management. The Report deals with fitness and probity, skills, and the need for robust systems, processes and controls. As set out in the Report of the Commission on Credit Unions many of the governance changes in credit unions will be phased in over time and will be calibrated according to the size and complexity of the credit unions to which they apply.
This fulfils a commitment under the EU/IMF Programme of Support.
Notes to the Editors
Central Bank Reform Act 2010
The Central Bank Reform Act 2010 (Reform Act) created a unified Central Bank of Ireland under the control of the Central Bank Commission and provided for the introduction of fitness and probity standards across the financial industry. The fitness and probity regime is currently being rolled-out across the sector on a phased basis.
The Reform Act was commenced in its entirety on 1st October 2010. Part 3 of the Act deals with the new fitness and probity regime that is already being introduced for the financial sector. Section 18(2) of the Reform Act states that Part 3 of the Act applies to and in relation to regulated financial service providers other than credit unions. Section 18(3) of the Act provides that, on and from a date to be fixed by the Minister for Finance by order, Part 3 applies to and in relation to all regulated financial service providers, including credit unions.
Report of the Commission on Credit Unions
This Report of the Commission on Credit Unions recommended that new governance requirements should be put in place in credit unions to reflect the modern regulatory framework for the sector. In recommending the implementation of minimum governance standards and a fitness and probity regime, the Report set out the Governance Standard with which credit unions will be expected to comply and includes details on the roles and responsibilities of the board, the chair, the manager, the nomination committee and the internal audit function as well as aspects of risk management and systems and controls requirements. It also provides some details on the operation of the new fitness and probity regime and minimum competency requirements.