These proposals will enhance consumer protection across all NICUs, and align both the prudential and consumer standards of NICUs with those of credit unions in other parts of the United Kingdom.
In particular, today’s joint paper discusses the manner in which NICUs will be regulated by the FSA, brought under the protection of the Financial Services Compensation Scheme and within the jurisdiction of the Financial Ombudsman Service.
These measures will provide NICU members with increased protection and peace of mind, as the Government strongly believes financial services consumers in Northern Ireland should have the same rights as those in the rest of the UK.
The Government is committed to promoting mutuals across the UK financial services sector. .As mutuals, credit unions play a major role in the overall financial services sector in Northern Ireland.
Mark Hoban MP, Financial Secretary to the Treasury, said:
"Members of Northern Ireland Credit Unions don't have the same rights and can't access the same products as members of credit unions in the rest of the United Kingdom. It is time for this to change.
"We have asked the FSA to regulate them and thereby strengthen the rights of members of credit unions in Northern Ireland. This is a further sign of our commitment to strengthen financial mutuals and foster diversity in financial services throughout the whole of the United Kingdom.”
Martin Stewart, the FSA’s head of building societies and credit unions, said:
“We have been working closely with HMT and DETI on the legislative and regulatory amendments necessary to transfer the regulation of NI credit unions to our remit.
"This will finally bring NI credit unions in line with other credit unions in Great Britain and will result in beneficial changes for these credit unions and their members. One of the main benefits will be that, for the first time, members will have greater consumer protection with cover from the FSCS and the ombudsman service.
“Over the next few months we will be engaging with NI credit unions and other stakeholders to encourage them to provide us and HMT with their views and suggestions so we can ensure the transfer process is as smooth as possible.”
The joint consultation paper proposes that from March 2012 NI credit unions will need to comply with an updated version of the Credit Union Sourcebook that currently applies to all credit unions in Great Britain.
This sets out, in one place, the prudential and reporting requirements specific to credit unions. The requirements will be proportionate to different levels of risk dependent on the type of activity the credit union undertakes.
