Legislation will herald new era of growth to the sector, says organisation
Industry association for credit unions Co-op Money NZ has welcomed the unanimous passing in Parliament of the third reading of the Friendly Societies and Credit Unions Bill.
Co-op Money said it is a significant milestone and endorsement for the future of the New Zealand credit union sector.
The bill is intended to remove unnecessary operating and compliance costs; promote greater efficiency, innovation, and accountability; bring credit unions into alignment with other financial service providers in New Zealand; and maintain the element of mutuality and the requirement of a common bond between members.
Co-op Money NZ interim chief executive officer Jonathan Lee said the bill will herald in a new era of growth and innovation for credit union sector, which has over $1 billion of assets and operates through 70 branches from Whangarei to Invercargill.
“The bill does away with the need for credit unions to have trustees, which will reduce a layer of complexity and cost and make it much simpler to do business for the benefit of our members,” Lee said. “This bill modernises the out of date legislation credit unions have had to operate under and means we can continue to provide the 190,000 credit union members with access to the latest core banking services but under a much more efficient structure by becoming bodies corporate with full capacity and powers of a natural person.”
Under the bill, credit unions will be able to easily expand their services to include lending to small-and-medium-sized enterprises (SME) in the next 12 months.
“Undoubtedly it will give the regions a much-needed boost,” Lee stated.
The bill will now proceed to receive the Royal assent from the Governor-General before becoming law.
