Credit union rules to change

Commerce Minister Craig Foss says changes are underway to give credit unions improved legal status and promote innovation, efficiency and accountability in the industry.

“Better regulation is a top priority for this Government.  We will soon introduce legislation to update the Friendly Societies and Credit Unions Act 1982,” Mr Foss says.

“Credit Unions play a valuable role in our communities and financial sector.

“This legislation will contain a number of amendments to give credit unions legal status and reduce unnecessary operating and compliance costs.

“Credit unions are currently unincorporated associations rather than bodies corporate.  The New Zealand Association of Credit Unions has been calling for legal status as bodies corporate to enable credit unions to have limited liability, own property, have perpetual succession and sue and be sued in their own name.

“Credit Unions will also be able to offer loans directly to small and medium enterprises related to members of the credit union. This will avoid the current law’s cumbersome process of making the loan to a member of the credit union who then on-lends it to the organisation.

“Continuous improvement and review is necessary to keep New Zealand’s regulatory framework fit for purpose and to eliminate any unnecessary costs of doing business.”