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CREDIT UNION ACT, 1997

Type Act

Publication 1997-05-03

Last updated 2025-09-30

State Partially repealed

Text Latest available text

Source Irish Statute Book

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articles 234

This is the most recent text the official source publishes. It is not a snapshot of the law as it stood on the date of each change.

38 amending acts · 2025-09-30, revised-IE-1997-act-15@2025-09-30

Act to make new provision in relation to credit unions and for connected purposes

Reform history JSON API

(b) that the copy of the instrument included in such an application, a note of any particulars specified by the F75[Bank] and so included and a copy of the acknowledgement of the application issued in pursuance of paragraph (a) are placed in the public file of the credit union;

and an acknowledgement issued under this subsection shall, unless the contrary is proved, be sufficient evidence that any document specified in the acknowledgement was delivered to the F75[Bank] on the date so specified.

F75[(4) Regulations under section 182 may provide for the giving of notice to the Bank of any release, discharge or other transaction relating to any charge in respect of which an application has been made for the purposes of this section and for the placing of any such notice on the public file of the credit union concerned.]

(5) If, in the case of such an instrument as is mentioned in subsection (1), it appears to the Court, on the application of the credit union which executed the instrument or of any other person claiming the benefit of the instrument, that by reason of inadvertence or other sufficient cause—

(a) an application for the recording of the charge to which the instrument relates was not made within the period of 21 days mentioned in subsection (2); or

(b) any matters were omitted from or were mis-stated in such an application,

the Court may, on such terms as it thinks fit, order that the period for making such an application shall be extended or, as the case may be, that the omission or misstatement shall be rectified.

Loans

35. Making of loans.

F76[35.—(1) (a) In this section "large exposure", in relation to loans of a credit union to a borrower or a group of borrowers who are connected, means the total exposure (including contingent liabilities) of the credit union where the total exposure to such borrower or group of borrowers would be greater than an amount (whether expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount) prescribed by the Bank.

(b) For the purposes of this subsection—

"control" has the meaning assigned to it by section 432 of the Taxes Consolidation Act 1997 and the other relevant provisions of Part 13 of that Act;

"group of borrowers who are connected" means 2 or more persons—

(i) who, unless it is shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other person or persons (not being individuals); or

(ii) between whom there is no relationship of control as set out in subparagraph (i), but who are to be regarded as constituting a single risk because they are so interconnected that, if one of them were to experience financial problems, the other person or some or all of the other persons would be likely to encounter repayment difficulties.

F77[(2) A credit union may—

(a) make a loan to a member of the credit union,

(b) enter into an agreement with one or more other credit unions in accordance with which the credit union agrees to participate in a loan to a member of one of those other credit unions (in this paragraph referred to as "the originating lender") by the originating lender, or

(i) the credit union and one or more other credit unions, and

(ii) one or more members of—

(I) the credit union, or

(II) one of those other credit unions,

in accordance with which each credit union that is a party to the agreement provides a loan to the member or those members, as the case may be,

for such purpose as the credit union considers appropriate and upon such security (or without security) and terms as the rules of the credit union may provide.]

F78[(2A) The ability of the loan applicant to repay a loan shall be the primary consideration in the underwriting process of the credit union making the loan or participating in the loan, as the case may be.]

(3) A credit union shall manage and control lending to ensure the making of loans does not involve undue risk to members’ savings taking into account the nature, scale, complexity and risk profile of the credit union.

(4) Every application to a credit union for a loan shall be in writing and shall state the purpose for which the loan is required and the security (if any) offered for it.

(5) A credit union shall not accept from an officer of the credit union a guarantee for a loan to another member unless that other member is the officer’s spouse or civil partner, child or parent.

(6) Where the rules of a credit union so provide, the credit union may determine in accordance with those rules the total, including percentage, amount of loans (if any) that it may grant to non-qualifying members.

(7) In relation to loans to which this section relates and for the adequate protection of the savings of members of credit unions, the Bank may prescribe one or more of the following:

(a) the classes of lending a credit union may engage in whether by reference to any common characteristic of the credit unions or loans concerned, or otherwise;

(b) the limits on the total, including percentage, amount of loans generally, or unsecured loans or class or classes of loans, that may be lent by credit unions, having regard to period or periods of time for which loans concerned are made;

(d) the limits on the concentration of lending, including concentration limits on loan classes, including concentration limits on loans to a member of a credit union;

(e) any other limit that the Bank considers appropriate.

(8) For the adequate protection of the savings of members of credit unions F79[the Bank may prescribe such other requirements, applicable to loans to which this section relates, as it considers necessary in relation to any one or more of the following matters:]

(a) the lending practices of credit unions, including—

(i) loan application assessments,

(ii) the making of provision for specified matters,

(iii) reviews to assess the adequacy of provisions,

(iv) maintaining policies for the holding of provisions, for credit and for credit control,

(v) the types of security that may be accepted;

(b) reporting loans to the Bank;

(c) the holding by credit unions of provisions, reserves or capital against loans or specified classes or types of loans.

(9) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply.

(10) A credit union shall ensure that it has appropriate processes, procedures, systems, controls and reporting arrangements to monitor compliance with the requirements of this section and any requirement imposed under this section.

(11) Subject to its rules, in respect of a loan, a credit union may accept, in addition to other forms of security—

(a) a guarantee by a member, or

(b) a pledge by a member of shares in or deposits with the credit union,

and, where such a guarantee or pledge is accepted, it shall be deemed to be a security for the loan.]

36. Approval of loans.

36.—(1) A credit union shall not make a loan to a member unless it is approved in accordance with this section.

(2) F82[A loan must be approved] according as the rules of the credit union require—

(a) by such number of members of the board of directors voting by secret ballot at a meeting of the board at which the application for the loan is considered as represents at least two-thirds of those present and a majority of the members of the board as a whole; or

(b) by such number of members of the credit committee present at a meeting of that committee at which the application for the loan is considered as represents at least two-thirds of those present and a majority of the committee members as a whole; or

F83[(d) in accordance with a loan approval process which has been approved by the board of directors.]

(3) F84[…]

(4) F84[…]

(5) F84[…]

(6) F85[…]

37. Appeal against non-approval of loan.

37.—F86[(1) If an application for a loan which was considered—

(a) by the credit committee,

(b) by a credit officer, or

was not approved under section 36, the applicant may appeal to an appellate body which, by a decision of such members of the body present at the meeting at which the appeal is considered as represents at least two-thirds of those present and a majority of the body as a whole, may give approval to the loan, overriding the decision of the credit committee, of the credit officer or that made in accordance with the approval process, as the case may be.]

(2) F87[…]

(3) F87[…]

37A. F88[Member to receive written notice of loan approval.

37A.—(1) On approving a loan in accordance with section 36 or 37, a credit union shall, in writing, notify the member who applied for the loan of the approval and of any time limit within which the approval will expire.

F89[(2) A notice under subsection (1) may be in a form that, when endorsed by the member on accepting a loan offered by the credit union, constitutes a credit agreement for the purposes of—

(a) sections 37B and 37C, or

(b) where the loan is for an amount between €200 and €75,000, the European Communities (Consumer Credit Agreements) Regulations 2010 (S.I. No. 281 of 2010).]]

37B. F90[Credit agreement in respect of loans exceeding €200.

37B.—(1) If the amount of a loan approved by a credit union exceeds €200, the credit union shall ensure that—

(a) a credit agreement is entered into in writing and signed by the member concerned and by or on behalf of all other parties to the agreement, and

(b) a copy of the agreement—

(i) is handed personally to the member immediately after the agreement is entered into, or

(ii) is delivered or sent to the member within 10 days after the agreement is entered into, and

(c) any contract of guarantee relating to the loan is in writing and signed by the guarantor and by or on behalf of all other parties to the agreement, and a copy of the guarantee and the agreement—

(i) is handed personally to the guarantor immediately after the contract is entered into, or

(ii) is delivered or sent to the guarantor within 10 days after the contract is entered into.

F91[(2) For the purposes of this section, a contract of guarantee—

(a) includes, where the member is not of full age, an indemnity provided by a parent or guardian of the member or by another person approved by the F92[credit union], and

(b) may form part of the relevant agreement or may be in a separate document.]

(3) A credit union that makes a loan without having complied with subsection (1) commits an offence.

(4) If a credit union is found guilty of an offence against subsection (3), the following provisions apply:

(a) the credit union is taken to have waived all interest agreed to be paid by the member in respect of the loan;

(b) the member, or the member’s personal representative, is entitled to recover as a debt, by proceedings brought in a court of competent jurisdiction, any interest paid in respect of the loan.]

37C. F93[Contents of credit agreements.

37C.—(1) When entering into a credit agreement with a member, a credit union shall ensure that it contains a statement setting out the following particulars:

(a) the name and address of each party to the agreement;

(b) the amount of the loan provided under the agreement and the total amount payable in respect of the loan;

(d) the date or dates on which the loan is to be provided (unless unascertainable at the time of the agreement);

(e) the number of repayment instalments under the agreement and amount of each of those instalments;

(f) the date, or the method of determining the date, on which each repayment instalment is payable;

(g) the rate of interest charged in respect of the loan and the relevant APR;

(h) the circumstances in which that APR may be amended;

(i) any charges that, although not included in the calculation of the APR, must be paid by the member in specified circumstances;

(j) the date on which the loan expires;

(k) the manner in which the member can terminate the agreement before the final repayment instalment is payable and the cost to the member of terminating the agreement;

(l) any cost or penalty that the member may incur for failing to comply with the agreement.

F94[ (2) The credit union shall also ensure that the agreement specifies a cooling-off period under which the member has a right to withdraw from the agreement without penalty if the member gives to the credit union a written notice to that effect within 14 days after—

(a) the day on which the credit agreement was concluded, or

(b) the day on which the member receives contractual terms and conditions and information in accordance with sections 37C and 37D if that date is later than the date referred to in paragraph (a).]

(3) F95[…]

(4) A credit union that fails to comply with subsection (1) or (2) commits an offence.]

F96[ (5) This section does not apply to credit agreements covered by the European Communities (Consumer Credit Agreements) Regulations 2010.]

37D. F97[Notice of important information to be included in credit agreements.

37D.—(1) A credit union shall not enter into a credit agreement with a member, unless the agreement and the notice referred to in section 37A(1) display prominently on their respective front pages, in a form approved by the Bank, the following information:

(a) the amount of the loan;

(b) the period of the agreement;

(d) the total amount repayable to the credit union;

(e) the cost of the loan to the member;

(f) the APR in respect of the loan;

(g) particulars of the cooling-off period.

(2) A credit union that contravenes subsection (1) commits an offence.]

F98[(3) This section does not apply to credit agreements covered by the European Communities (Consumer Credit Agreements) Regulations 2010.]

37E. F99[Definition and calculation of "APR" for the purposes of sections 37C and 37D.

F100[37E.—(1) For the purposes of sections 37C and 37D "annual percentage rate of charge", in relation to a credit agreement entered into between a credit union and a member, means the annual percentage rate of charge as defined under Regulation 6 of the European Communities (Consumer Credit Agreements) Regulations 2010.

(2) The annual percentage rate of charge specified in a credit agreement shall be in accordance with Part 5 of the European Communities (Consumer Credit Agreements) Regulations 2010.]]

37F. F101[Regulations for the purposes of sections 37A-37D.

37F.—F102[…]]

38. Interest on loans.

38.—(1) A credit union may charge interest on loans made to its members under section 35 subject to the following conditions—

F103[(a) the interest on a loan shall not at any time exceed the rate, specified in the order made under subsection (3) applicable to—

(i) the credit agreement under which the loan is made, or

(ii) where there is no credit agreement, the loan;]

(b) F104[…]

F105[(2) If a credit union knowingly charges or accepts interest on a loan at a rate greater than that permitted under this section—

(a) all the interest agreed to be paid by the member shall be deemed to have been waived by the credit union; and

(b) any interest paid on the loan shall be recoverable summarily by the member (or his personal representative) as a simple contract debt.]

F106[(3) The Minister may, after consultation with the Advisory Committee and such other body as the Minister considers appropriate in the circumstances, by order specify a rate of interest for the purpose of subsection (1)(a).

(4) An order made under subsection (3) shall apply to a credit agreement entered into, or, where there is no credit agreement, a loan made—

(a) after the date on which the order comes into operation, and

(b) before the date, if any, on which the order next made under subsection (3) comes into operation.

(5) The Minister shall have regard to the following when making an order under subsection (3):

(a) the interest rates charged in respect of loans by credit institutions and other providers of credit;

(b) the interest rates payable by credit unions on deposit accounts and in respect of other sources of funding for loans;

(c) the need to avoid distortions in competition between credit unions, credit institutions and other providers of credit;

(d) the financial stability and well-being of credit unions generally.]

Other transactions

39. Promissory notes and bills of exchange.

39.—(1) A promissory note or bill of exchange shall be deemed to have been made, accepted or endorsed on behalf of a credit union if made, accepted or endorsed in the name of the credit union by a person acting under its authority.

(2) Where no such authority as is referred to in subsection (1) exists, the F107[Bank] may, if F107[it] thinks fit, appoint a person or persons to act on behalf of the credit union; and any person or persons so appointed shall have the like powers under subsection (1) as if acting under the authority of the credit union.

40. Contracts.

40.—(1) Contracts may be made, varied or discharged on behalf of a credit union as follows:

(a) a contract which, if made between individuals, would be by law required to be in writing under seal may be made on behalf of the credit union in writing under the common seal of the credit union;

(b) a contract which, if made between individuals, would be by law required to be in writing, signed by the parties to be charged with the contract, may be made on behalf of the credit union in writing by any person acting under the express or implied authority of the credit union;

(c) a contract which, if made between individuals, would by law be valid although made by parol only, and not reduced into writing, may be made by parol on behalf of the credit union by any person acting under the express or implied authority of the credit union;

(d) a contract made according to this subsection may be varied or discharged in the same manner in which it is authorised by this section to be made and a contract under seal which, if made between individuals, might be varied or discharged in writing not under seal, signed by any person interested in the contract, may be similarly varied or discharged in writing not under seal on behalf of the credit union, signed by any person acting under the express or implied authority of the credit union.

(2) A signature purporting to be made by a person holding any office in a credit union attached to a writing by which any contract purports to be made, varied or discharged by or on behalf of the credit union shall, unless the contrary is proved, be taken to be the signature of a person holding that office at the time when the signature was made.

(3) Where authority no longer exists for the discharge of a credit union's obligations under subsection (1), the F108[Bank] may, if F108[it] thinks fit, appoint a person to act on behalf of the credit union, and a person so appointed shall have the like powers to make, vary or discharge contracts on behalf of the credit union as if acting under its authority.

(4) A contract which may be or have been made, varied or discharged according to the provisions of this section shall be effectual in law and bind the credit union and its successors and all other parties to the contract.

41. Acquisition, holding and disposal of land.

41.—(1) A credit union may acquire and hold in its own name any land for the purpose of conducting its business on the land (including erecting a building on the land for that purpose) but for no other purpose.

(2) A credit union may dispose of any land held by it and, where it does so—

(a) no person shall be bound to inquire as to the authority for any dealing with the land by the credit union; and

(b) a receipt of the credit union shall be a discharge for all money arising from or in connection with any dealing with land by it.

(3) For the purposes of subsection (2) (but not subsections (4) and (5)), a disposal of land held by a credit union includes the creation, out of the interest held by the credit union, of a lease, sub-lease or lesser interest.

(4) If a building held by a credit union entirely ceases to be occupied for the purposes of the business of the credit union, the credit union shall dispose of its interest in that building as soon as it is practicable to do so.

F109[(5) If the Bank is of the opinion that any building or other land held by a credit union is not in the best interest of the credit union, it may decide to direct and direct the credit union to dispose of its interest in it.]

(6) F110[…]

(7) Section 3 (3) shall not apply to a direction under subsection (5).

42. Receipt for repayment of secured debt.

42.—On payment of all money intended to be secured to a credit union on the security of any property, F111[the debtor or the debtor’s successor in title] or personal representatives shall be entitled to a receipt in the form set out in the Second Schedule, or in a form to substantially the like effect.

Investments etc.

43. Investments.

F112[43.—(1) A credit union shall manage its investments to ensure that those investments do not (taking account of the nature, scale, complexity and risk profile of the credit union) involve undue risk to members’ savings and, for that purpose, before making an investment a credit union shall assess the potential impact on the credit union, including the impact on the liquidity and financial position of the credit union.

(2) A credit union may invest any of its funds, which are surplus to its operating requirements and are not immediately required for the purposes of the credit union, in any one or more of the following:

(a) the shares of, or deposits with (other than deposits to which subsection (6) relates) or loans to, another credit union as the Bank may prescribe;

(b) the shares of a society registered under the Industrial and Provident Societies Acts 1893 to 1978 as the Bank may prescribe;

(3) For the purposes of subsection (2)(c) the Bank may prescribe investments in which a credit union may invest its funds. In prescribing matters for the purposes of subsection (2) and having regard to the need to avoid undue risk to members’ savings, the Bank may also prescribe other matters in relation to prescribed investments, including any of the following:

(a) the classes of investments, including, where appropriate, any investment project of a public nature the credit union may invest in;

(b) the quality of investments and quality of counterparties that the credit union may invest in;

(c) the maximum, including percentage, amount (by reference to a credit union’s surplus funds to which subsection (2) relates or otherwise) of a class of investments that may be invested in;

(d) the term to maturity of a class of investments;

(e) the currency of a class of investments;

(f) limits for investment, whether by reference to maturity, currency, counterparty, sector, instrument or otherwise;

(g) any other matters that the Bank may consider necessary in the circumstances.

(4) The Bank may prescribe matters for the purposes of any distribution policy to be applied by a credit union in respect of investment income.

(5) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply.

(6) In so far as any funds of a credit union that are surplus to its operating requirements—

(a) are not immediately required for the purposes of the credit union,

(b) are not invested in accordance with subsection (2), or

those funds shall be kept by the credit union on current account with a credit institution.

(7) Where any funds of a credit union are on current account with, or on loan to, an institution which ceases to be a credit institution, the credit union shall take all practicable steps to call in and realise the loan within the period of 3 months from the time when the institution so ceased or, if that is not possible, as soon after the end of that period as possible.]

44.—(1) By a resolution passed by a majority of its members present and voting at a general meeting, a credit union may establish a special fund to be used by the credit union for such social, cultural or charitable purposes (including community development) as have been approved, either generally or specifically, by a similar resolution; and any such special fund shall be maintained separately from the rest of the credit union's finances.

(2) Subject to subsection (4), moneys may be paid into a special fund established by a credit union under this section only out of the annual operating surplus of the credit union; and no moneys may be so paid unless the directors are satisfied—

(a) that adequate provision has been made out of the surplus in question to cover all current and contingent liabilities and to maintain proper reserves; and

(b) that the payment of the moneys into the special fund will not affect the financial stability of the credit union.

(3) Subject to subsection (5), the amount of moneys which may be paid as mentioned in subsection (2) out of the annual operating surplus of any year shall not exceed 0.5 per cent. of the value of the credit union's assets as shown in the accounts for the most recent financial year ending before the date of the payment.

(4) In respect of the financial year in which the special fund is established, there may be paid into the special fund (in addition to any amount paid as mentioned in subsection (2)) an amount not exceeding 2.5 per cent. of the accumulated reserves of the credit union, excluding the F114[reserves required to be held under section 45].

(5) If, by a resolution passed by not less than two-thirds of the members of the credit union present and voting at a general meeting called for the purpose, a credit union resolves to increase the percentage applicable to it under subsection (3) to a percentage to which the F115[Bank] has consented in writing, that subsection shall have effect accordingly.

(6) Where a credit union has established a special fund under this section, the social, cultural or charitable purposes for which it is to be used may be varied by a further resolution passed as mentioned in subsection (1).

(7) If at any time—

(a) the board of directors make a recommendation in writing to the members of a credit union that it is appropriate to wind up a special fund established under this section, and

(b) a resolution for winding up the special fund is passed by a majority of the members of the credit union present and voting at a general meeting,

the moneys standing to the credit of the special fund shall be transferred to the general funds of the credit union and the special fund shall cease to exist.

45. Statutory reserve.

F116[45.—(1) In this section—

"assets" means such assets as the Bank may from time to time specify for the purposes of this section;

"regulatory reserve" means a reserve that is a realised financial reserve which is—

(a) unrestricted and non-distributable,

(b) identified separately in a credit union’s accounts, and

"regulatory reserve requirement" means the amount required to be held in the regulatory reserve of a credit union, expressed as a percentage of the assets of a credit union and prescribed by the Bank.

(2) A credit union shall maintain reserves that are adequate having regard to the nature, scale, complexity and risk profile of its business.

(3) The Bank may prescribe the regulatory reserve requirement that a credit union shall maintain at a minimum and, in so prescribing, may include conditions on the application of the regulatory reserve requirement. For that purpose the Bank may also prescribe in respect of other matters related to the regulatory reserve requirement, including any of the following:

(a) the application of risk weightings to assets for the purposes of calculating the regulatory reserve requirement;

(b) the types and attributes of the assets or liabilities included in the calculation of the regulatory reserve requirement;

(4) Where requirements to which subsection (3)(c) relate have been prescribed, they shall not apply to a credit union established as a result of amalgamations of 2 or more existing credit unions.

(5) A credit union shall maintain reserves, in addition to the regulatory reserve requirement prescribed under subsection (3) that—

(a) it has assessed are required in respect of operational risk having regard to the nature, scale, complexity and risk profile of its business, and

(b) which shall not be less than those required under any additional reserve requirement applicable to it in respect of operational risk by virtue of subsection (6).

(6) Either or both the level of additional reserves to be maintained by a credit union and the basis for calculating the additional reserves to be maintained by a credit union under this section in respect of operational risk may be prescribed by the Bank. For that purpose the Bank may also prescribe in respect of ancillary matters related to the additional reserves held in respect of operational risks.

(7) A credit union that fails to meet any reserve requirement under this section—

(a) may be required by the Bank to transfer all or part of its surplus to reserves, and

(b) shall secure the written approval of the Bank before paying a dividend or loan interest rebate.

(8) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or of the category or categories of credit unions, to which the regulations will apply.

(9)
(a) Pending the prescribing by the Bank of reserve requirements for the purposes of this section in respect of credit unions generally or a category of credit unions, the reserve requirements applicable to credit unions under section 85 shall continue to apply generally or to such category of credit unions, as the case may be.

(b) Where reserve requirements have been prescribed by the Bank for the purposes of this section in respect of credit unions generally or a category of credit unions, then section 85 shall cease to apply generally to that category of credit unions, as the case may be, in respect of the matters so prescribed.]

46. Savings protection scheme.

46.—F117[…]

47. Insurance against fraud of officers etc.

47.—(1) A credit union shall at all times maintain in force, in respect of each financial year, a policy of insurance which complies with any prescribed requirements and which insures the credit union in respect of loss suffered or liability incurred by reason of the fraud or other dishonesty of its officers F118[…].

(2) F119[…]

(3) F120[…]

Provision of additional services to members

48. Power to provide additional services.

48.—F121[(1) Subject to the following provisions of this Part, a credit union may provide, as principal or agent, additional services of a description that appears to the credit union and to the Bank, to be of mutual benefit to its members.]

F122[(2) In this section and the following provisions of this Part "additional services", in relation to a credit union, means any services other than those—

(a) for which provision is made by the preceding provisions of this Part, or

(b) which are being prescribed for the purposes of this section as being services of a description that appears to the Bank to be of mutual benefit to its members,

and regulations made by the Bank for the purposes of paragraph (b) may make the exclusion of any services from being additional services conditional on compliance with such conditions as may be prescribed by the Bank.]

(3) Nothing in this section or the following provisions of this Part affects the operation of any enactment which is not contained in this Act and which, in whole or in part, relates to the provision of financial or other services of any description.

(4) In order to enable a credit union to provide additional services of any description—

F123[(a) the credit union must adopt a decision to provide additional services of that description by a resolution passed by not less than two-thirds of the members present and voting at an annual general meeting or at a special general meeting called for the purpose of considering the resolution, or the credit union must adopt a decision to provide additional services of that description by a resolution of F124[the board of directors; and]]

(b) the provision of the services must be approved by the F125[Bank] in accordance with section 49 and the services must be provided in accordance with the terms and conditions F124[of the approval.]

(5) Notice shall be given of a resolution under subsection (4)(a) in accordance with the rules of the credit union or, if the rules do not make special provision as to notice of such a resolution, the like notice shall be given as is required by the rules for a resolution to amend the rules; and notice of the resolution shall contain or be accompanied by a statement giving—

(a) a description of the services which it is proposed to provide;

(b) an assessment of the financial and other implications for the credit union of the provision of those services; and

(c) details of such other matters as the F125[Bank] may by notice in writing require to be brought to the attention of the members of the credit union concerned.

(6) Before giving notice of a resolution as mentioned in subsection (5), a credit union shall consult the F125[Bank] and the F125[Bank] shall give a preliminary view as to whether and to what extent the provision of the service would be likely to be approved by F125[it]; but the giving of such a preliminary view shall not prejudice the decision of the F125[Bank] under section 49 (3).

F127[(7) The Bank may specify in writing such requirements as it considers necessary for credit unions providing additional services; and different requirements may be so specified in relation to different descriptions of additional services and apply to different classes of credit unions.]

F128[(8) A credit union shall not be able or, as the case may be, shall cease to be able to provide additional services of a description to which requirements under subsection (7) apply if—

(a) the credit union does not satisfy those requirements, or

(b) within the period of 12 months beginning on the date on which approval for the provision of the services is given under section 49, the credit union does not begin to provide those services;

but, if a credit union ceases to comply with any of those requirements, the cessation shall not, of itself, impose an obligation on the credit union to dispose of any property or right acquired in connection with the provision of the additional services concerned.]

49. The Registrar’s approval of provision of additional services.

49.—(1) An application by a credit union for the approval of the provision of additional services of any description (in this section referred to as an “approval application”) shall be made to the F129[Bank] in such manner as F129[it] may by rules direct, and shall be accompanied by such information as may be so specified.

(2) Without prejudice to the generality of the powers of the F129[Bank] under subsection (1), an approval application shall include information about—

(a) the protection of members for whom the services are to be provided from conflicts of interest that might otherwise arise in connection with the provision of the services;

(b) the provision proposed for securing that adequate compensation is available to those members in respect of negligence, fraud or other dishonesty on the part of officers F130[…] of the credit union in connection with the provision of the services;

(c) the extent to which and the manner in which the provision of the services will require the involvement of persons with particular qualifications or experience;

(d) the cost of providing the services;

(e) the income expected to accrue from any charges made for the services; and

(f) the credit union’s proposed principal, in a case where the approval application relates to the provision of services by the credit union as agent for another;

and, where an approval application relates to the provision of additional services of more than one description, the information referred to above shall be given separately in respect of each description of services.

(3) Having considered an approval application (which complies with subsections (1) and (2)), the F129[Bank] shall give notice, either—

(a) granting approval;

(b) refusing to grant approval; or

(c) granting approval subject to whatever conditions (including restrictions or exclusions) F129[it] considers appropriate;

and the F129[Bank] shall not grant an approval application in respect of any description of additional services unless F129[it] is satisfied that the resolution required by section 48 (4) (a) in relation to services of that description has been passed.

(4) In making F129[its] decision on an approval application, the F129[Bank] shall have regard to the interests of the public and of the members and creditors of the credit union, to the orderly and proper regulation of the business of the credit union and to such other considerations as F129[it] thinks proper.

(5) Subject to subsection (6), within four months of the date on which F129[it] receives an approval application, the F129[Bank] shall either notify the credit union of F129[its] decision on the application or require the credit union to supply to F129[it] such additional information as F129[it] considers necessary to enable F129[it] to reach a decision and, where the F129[Bank] requires the provision of such additional information, F129[it] shall notify the credit union of F129[its] decision on the approval application not later than four months from the date of F129[its] receipt of that additional information.

(6) Where an approval application relates to the provision of services by the credit union as agent (and not also as principal), subsection (5) shall have effect with the substitution for any reference to four months of a reference to two months.

(7) Without prejudice to the generality of subsection (3)(c), the conditions which the F129[Bank] may impose in granting an approval application may, in particular, include provisions about—

(a) the amount of funds that may be applied by the credit union to the services;

(b) whether the credit union may act as principal or agent in providing the services;

(d) limits on any guarantees, bonds, contracts of suretyship or indemnities given or entered into by the credit union;

(e) whether and to what extent the approval of the F129[Bank] is to be obtained in respect of particular proposals;

(f) the qualifications required to be held by officers F131[…] of the credit union providing the services;

(g) the avoidance of conflicts of interest;

(h) the charges to be made in relation to the provision of any services;

(i) the preparation of accounts in respect of services being provided;

and different conditions may be so imposed in relation to different descriptions of additional services.

(8) F132[…]

50. Supplementary provisions as to Registrar’s functions.

50.—(1) In the exercise of F133[its] powers under sections 48 and 49 and this section, the F133[Bank] may at any time consult the Advisory Committee and such other bodies as appear to F133[it] to be expert or knowledgeable in matters relating to credit unions.

(2) Without prejudice to the generality of subsection (1), the F133[Bank] may commission an independent assessment of the capacity of a credit union to provide any or each description of the additional services in respect of which it has made an approval application; and, if the F133[Bank] so directs, the credit union shall defray the costs of such an assessment.

(3) If it appears to F133[it] appropriate to do so, the F133[Bank] may at any time by notice—

(a) withdraw an approval granted under section 49;

(b) revoke or vary any conditions imposed on such an approval; or

but any such action by the F133[Bank] shall not require the disposal of any property or right already acquired.

(4) In this section “approval application” has the same meaning as in section 49.

51. Requirements applicable to credit unions providing additional services.

51.—(1) A credit union shall not make or offer to make a loan to a member subject to a condition that any additional services which the member may require (whether or not in connection with the loan) shall be provided by (or through the agency or assistance of) the credit union.

(2) Where, in connection with a loan by a credit union, any additional services are made available by a credit union, the credit union shall not make those services available except on terms which distinguish the consideration applicable to each service which is so made available.

F134[Referral to another credit union

51A.—(1) Where the rules of a credit union so provide, the credit union may refer a member of the credit union (in this section referred to as the "referring credit union") to another credit union (in this section referred to as the "receiving credit union") for the purpose of the provision by the receiving credit union of a service to the member of the referring credit union.

(2) Where a member of a referring credit union is referred in accordance with subsection (1)—

(a) the receiving credit union may provide the service in respect of which the referral is made to the member concerned, and

(b) the member concerned shall be deemed, for the purpose only of the provision of the service concerned, to be a member of the receiving credit union for the period during which the service is provided.]

52. Appeal against certain decisions of Bank.

F135[52.— The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942:

(a) a decision by the Bank under section 6A for the purposes of subsection (1) or (2) of that section;

(b) a decision by the Bank under section 11(5) to direct a credit union to change its name to a name approved by the Bank;

(c) a decision by the Bank under section 41(5) to direct a credit union to dispose of the interest to which the direction relates;

(d) a decision by the Bank under section 49(3)(b) to refuse to grant approval;

(e) a decision by the Bank under section 50(3)(a) to withdraw an approval granted under section 49;

(f) a decision by the Bank under section 50(3)(b) to vary any condition imposed on such an approval;

(g) a decision by the Bank to impose any condition on such an approval (whether at the time the approval is granted or later by virtue of section 50(3)(c));

(h) a decision by the Bank to give a regulatory direction under subsection (1) or (2) of section 87.]

PART IV Management of Credit Unions

Directors

53. Board of directors.

F136[53.— (1) A credit union shall have a board of directors which shall have responsibility for the general control, direction and management of the credit union.

(2) The board of directors of a credit union shall be of sufficient number and expertise to adequately oversee the operations of the credit union.

(3) Except in the circumstances set out in subsection (4), the number of directors shall be specified in the registered rules as set out in section 13 and shall be—

(a) not less than 7,

(b) not more than 11, and

(4) The number of directors of a credit union may be more than 11 or may be an even number if an additional director is appointed under section 95A.

(5) Each director of a credit union shall ensure that he or she has sufficient time to devote to the role of director and the responsibilities associated with that role as indicated by the nomination committee under section 56B(4)(g).

(6) F137[Subject to section 63A(6), the board of directors] of a credit union shall be elected—

(a) where the organisation meeting occurs after the commencement of this provision (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012), by secret ballot at the organisation meeting and, subject to subsection (15) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting, and

(b) in any other case, by secret ballot at the annual general meeting first occurring after the commencement of this provision (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012) or, if earlier than that annual general meeting, at a special general meeting called for the purpose of such ballot and, subject to subsection (15) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting.

(7) The term of office of a director of a credit union—

(a) shall begin at the conclusion of the general meeting at which the director is elected,

(b) shall not extend beyond the third subsequent annual general meeting after his or her election, and

(c) subject to paragraph (b), subsections (8) and (12) and all other applicable requirements of financial services legislation, shall be determined in accordance with the registered rules,

but, except where this Act or any other applicable requirement of financial services legislation or the registered rules otherwise provides, a retiring director shall be eligible for re-election.

(8) At each annual general meeting of a credit union the number of directors whose term of office expires shall, as near as possible, be the same.

(9) Only a natural person of full age may be a director of a credit union.

(10) The following persons are not eligible to become a director of a credit union:

(a) F137[an employee or voluntary assistant of the credit union (other than the manager)] or an employee of any other credit union;

(b) a member of the board oversight committee of the credit union;

(d) an employee of a representative body of which the credit union is a member, where that employee’s role could expose them to a potential conflict of interest;

(e) a public servant (within the meaning of the Financial Emergency Measures in the Public Interest Act 2009) assigned to the Department of Finance and involved in advising the Minister on credit union issues or in the examination of credit union issues;

(f) a member of the Commission of the Bank;

(g) an officer (within the meaning of section 2 of the Central Bank Act 1942) or other employee of the Bank and who is involved in the regulation of credit unions;

(h) the Financial Services Ombudsman (within the meaning of section 2 of the Central Bank Act 1942) or a Bureau staff member (within the meaning of section 57BA of that Act);

(i) a member of the Irish Financial Services Appeals Tribunal or a member of its staff (including the Registrar of the Appeals Tribunal appointed under section 57J of the Central Bank Act 1942);

(j) the chief executive of the National Consumer Agency, an authorised officer of that Agency (within the meaning of section 2 of the Consumer Protection Act 2007) or any other member of its staff;

(k) the auditor of the credit union or a person employed or engaged by that auditor;

(l) a solicitor or other professional adviser who has been engaged by or on behalf of the credit union within the previous 3 years;

(m) a person who is a spouse or civil partner, parent, sibling or child of a director, board oversight committee member or employee of that credit union.

(11) A person shall resign from being a director of a credit union if and when he or she becomes a person to whom any provision of subsection (10) relates.

(12) A member of a credit union may not be appointed or elected to the board of directors if he or she has served for more than 12 years in aggregate in the previous 15 years on either the board of directors or the board oversight committee of the credit union.

(13) For directors of a credit union or members of the board oversight committee who were already directors or members of the board oversight committee on the date of the commencement of this section in respect of such credit union, the 12 year period set out in subsection (12) commences on the date this subsection so commences.

(14) F137[A director of a credit union (other than the chair of the board of directors of the credit union)] may not serve more than 3 consecutive years in any one principal post (as referred to in section 63) and a person who has been the holder of such a principal post shall not be eligible for re-election thereto until after the expiry of one year since he or she last held it.

(15) Subject to the requirements set out in this section and all other applicable requirements of financial services legislation, the board of directors may at any time and from time to time appoint a member of the credit union (including a former director) to be a director to fill a casual vacancy.

(16) A director appointed under subsection (15) shall hold office from the date of the appointment to the next following annual general meeting of the credit union or, if it is earlier, the next special general meeting at which an election is held for directors of the board of directors.

(17) Where all the directors of a credit union intend to resign on the same date, the secretary shall give written notice of the directors’ intention to the Bank and the board oversight committee.]

54. Directors: procedural provisions.

F139[54.— (1) The board of directors of a credit union shall meet as often as may be appropriate to fulfil its responsibilities effectively and prudently and reflecting the nature, scale and complexity of the credit union, but in any event—

(a) the board of directors shall hold at least F140[6 meetings] in any year, and

(b) the interval between any 2 meetings of the board of directors shall not be greater than F140[10 weeks].

(2) Meetings of the board of directors of a credit union shall be chaired by the chair or, in his or her absence, by the vice-chair or, in the absence of the chair and the vice-chair, in a manner prescribed by the Bank or, if no manner is so prescribed, in a manner provided for in the rules of the credit union.

(3) The secretary of a credit union shall keep minutes of all meetings of the board of directors.

(4) Subject to subsection (10), the chair shall cause a detailed agenda of items for consideration and discussion to be prepared by the secretary of the credit union for each meeting of the board of directors.

(5) The secretary of the credit union shall cause the detailed agenda and proposed minutes of the previous meeting of the board of directors to be circulated sufficiently in advance of each board of directors meeting to allow all directors adequate time to consider them. Where necessary, sufficient and clear supporting information and papers shall also be so circulated.

(6) Nothing in subsection (4) or (5) shall be read as preventing discussion or consideration of any matter urgently arising that is not included in the detailed agenda but any such matter shall, without prejudice to subsection (7), be recorded in the minutes of the meeting concerned and, where appropriate or the board of the credit union so directs, clear supporting information and papers relating to the matter so arising shall be circulated as soon as practicable in the circumstances.

(7) Minutes of all meetings of the board of directors shall—

(a) be prepared with all decisions, discussions and points for further action being documented,

(b) record all dissensions or minority votes in terms acceptable to the dissenting person or minority voter, and

(c) provide sufficient detail to identify the nature and extent of the discussion on any matter and the decision or other outcome.

(8) All discussions at board of directors meetings relating to conflicts of interest (whether of board members or otherwise) shall be recorded in sufficient detail in the minutes of the meeting concerned, together with a record of any action taken or proposed to be taken.

(9) The minutes of each meeting of the board of directors shall be motioned for agreement and approval at the next subsequent meeting of the board of directors. Those minutes shall be so approved or approved subject to such qualifications and modifications as may be made to them at that subsequent meeting. Any such modification or qualification shall also be minuted in the minutes of that subsequent meeting.

(10) In causing the agenda for a meeting of directors of a credit union to be prepared, the chair shall endeavour to ensure that adequate and sufficient time is provisionally allocated to all material relevant matters for discussion.

(11) Directors of the board of directors shall attend every meeting of the board of directors unless they are unable to attend due to circumstances beyond their control.

(12) The extent of the attendance of each board member at meetings of the board of directors shall be recorded in the minutes for the meeting concerned.]

55. Functions of board of directors.

F141[55.— (1) Without prejudice to the generality of section 53(1), the functions of the board of directors of a credit union shall include the following:

(a) setting the strategy for the credit union by preparing, including active participation and examination of strategies being developed or proposed by the manager, management team or others and preparing and adopting a strategic plan;

(b) monitoring the implementation of the strategic plan by the credit union, reviewing the performance of the credit union against the measurements defined in the strategic plan and assessing, on a regular basis but at least annually, how the strategic objectives of the credit union are being achieved;

(c) reviewing the credit union’s strategic plan on a regular basis, but at least annually, to ensure that it remains relevant and up to date and modifying or revising the strategic plan to incorporate any changes required as a result of the review;

(d) operating a comprehensive decision-making process, considering all matters it considers to be of material relevance to the credit union and documenting the reasons for its decisions;

(e) the appointment of a manager, risk management officer and compliance officer and the approval of the appointment of any other member of the management team;

(f) ensuring that there is an effective management team in place;

(g) reviewing the performance of the manager on an annual basis and monitoring on an ongoing basis his or her continued appropriateness to be the manager;

(h) ensuring that the performance of every other employee and voluntary assistant, is reviewed and monitored on an ongoing basis to ensure his or her continued appropriateness for his or her role in the credit union;

(i) identifying, in consultation with the manager, other officer positions within the credit union that—

(i) are essential to the proper management of the credit union,

(ii) are likely to enable the person holding the position to exercise significant influence on the conduct of the affairs of the credit union,

and which, together with the manager and risk management officer of the credit union are referred to in this Act as the ‘management team’;

(j) ensuring there is an appropriate succession plan in place in respect of each of the positions that constitute the management team;

(k) exercising appropriate oversight over execution by the management team of the agreed strategies, goals and objectives;

(l) reviewing and approving all elements of the risk management system on a regular basis, but at least annually and, in particular—

(i) assessing the appropriateness of the risk management system,

(ii) taking account of any changes to the strategic plan including the credit union’s resources or the external environment, and

(iii) taking measures necessary to address any deficiencies identified in the risk management system;

(m) ensuring compliance with all requirements imposed on the credit union by or under the Credit Union Acts 1997 to 2012 or any other financial services legislation;

(n) the removal from office of an officer of the credit union, except directors or members of the board oversight committee, where the board of directors has duly determined that there has been a failure by the person concerned to perform duties or responsibilities;

(o) approving, reviewing, and updating, where necessary, but at least F142[every 3 years, all plans and policies] of the credit union, including the following:

(i) lending policies including lending limits;

(ii) policies in relation to members’ shares and deposits including the setting of a maximum number of shares a member can hold and a maximum amount that a member may deposit;

(iii) liquidity management policies;

(iv) reserve management policies;

(v) investment policies;

(vi) the designating of depositories for the funds of the credit union and signatories to cheques, drafts or similar documents drawn on the credit union;

(vii) standards of conduct and ethical behaviour for officers;

(viii) remuneration policies and practices;

(ix) compliance plan and policies;

(x) records management policies;

(xi) information systems and management information policies;

(xii) business continuity plan;

(xiii) asset and liability management policies;

(xiv) outsourcing policies;

(xv) risk management policy;

(xvi) conflicts of interest policy;

F143[(xvia) environmental, social and governance policy;]

(xvii) such other matters as the Bank may prescribe;

(p) the recommendation to members, for approval, of dividends to members;

(q) ensuring the accounts of the credit union are submitted for audit;

(r) reporting to the members of the credit union at the annual general meeting, including nominating a member of the board to present the annual accounts at the annual general meeting;

(s) reviewing and considering any update of financial statements provided to the board by the manager under section 63A(4)(c).

(2) In deciding on the roles, responsibilities and administrative structures and reporting relationships of all officers, the board of directors of a credit union shall ensure that no single person is responsible for making all of the material decisions of the credit union or has effective control over the business of the credit union.

(3) The board of directors shall implement a risk management process that ensures that all significant risks are identified and mitigated to a level consistent with the risk tolerance of the credit union.

(4) The board of directors shall carry out at least annually a comprehensive review of its overall performance, relative to its objectives and implement any necessary changes or improvements.

(5) The review carried out by the board of directors under subsection (4) shall be documented in writing.

(6) In respect of the exercise of functions by the board of directors of a credit union, the board shall set out in writing a register of matters or categories of matters that require the board’s approval and which cannot be assigned by the board to other persons for performance on the board’s behalf. The register shall be used to record all such approvals by the board of directors.

(7) Where the board of directors causes any matter relating to its functions to be performed or carried out on its behalf, it shall continue to have responsibility for the matter.

(8) The board shall regularly review, but at least annually, the performance and effectiveness of the internal audit function, including reviewing and approving the internal audit charter and the internal audit plan and reviewing and approving any modifications to them, ensuring they are updated and that any issues identified in the review are managed and rectified in a timely manner.]

55A. F144[Chair of board of directors, etc.

55A.—(1) The board of directors of a credit union shall elect one of its number to be the chair of the board, subject to that person being eligible to be chair of a board of directors.

(2) The chair of the board of directors of a credit union may be referred to by whatever title the rules of the credit union provide.

(3) The functions of the chair of a credit union include the following:

(a) ensuring that meetings of the board of directors operate in an efficient and effective manner;

(b) encouraging constructive discussions and debate at board of directors meetings;

(c) promoting effective communications between members of the board of directors and between the board of directors and the management team of the credit union;

(d) causing the agenda to be set by the secretary, attending and chairing board of directors meetings;

(e) ensuring that the responsibilities of the nomination committee, as set out in section 56B(4), are performed by that committee;

(f) conducting a performance evaluation of each member of the board of directors on an annual basis to ensure that each director is complying with the obligations under financial services legislation and the board of directors’ objectives as set out in the credit union’s strategic plan;

(g) facilitating the work of the board oversight committee through providing it with all reasonable assistance to enable that committee to carry out its functions;

(h) ensuring that conflicts of interest are appropriately managed by the board of directors, and by each of them, in accordance with section 69.

(4) A director of the credit union shall not be eligible to be elected as chair if the director had, at any time during the 5 years preceding the election, been—

(a) an employee of that credit union, or

(b) a person who acted in any management capacity (whether voluntary or paid) in that credit union,

and, for the purposes of this subsection, ‘acted in any management capacity’ includes performing a role where the person was in a position to exercise a significant influence on the conduct of the credit union’s affairs but does not include acting as a member of the board of directors or as a member of the board oversight committee.

(5) Subject to subsection (7)(a), the term of office of a chair of a board of directors shall be for the period of one year.

(6) A chair of a board of directors shall not serve more than 4 consecutive terms in that position and, having so served, shall not be eligible to be chair until—

(a) after another director has served at least one term as chair, or

(b) where such other director has served for less than one year, after 2 or more directors have served as chair for the equivalent of at least one complete term,

but nothing in this section shall prevent a former chair of the board of directors from being selected under section 54(2) from chairing a meeting of the board in the absence of the chair and, where relevant, the vice-chair.

(7) A person shall cease being chair of a board of directors if—

(a) the person ceases being a director for any reason, or

(b) the person resigns from being chair in accordance with subsection (8).

(8) A director may resign from being chair of the board of directors by sending his or her resignation in writing to the secretary of the credit union.]

56. Removal of director from office.

56.—(1) Subject to subsection (2), a credit union may, by resolution of a majority of the members present and voting at a special general meeting called for that purpose, remove a director from office.

(2) The secretary shall, not less than 21 days before the date of the special general meeting at which it is proposed to move a resolution referred to in subsection (1), give written notice of the meeting to the director concerned.

(3) Where notice is given of such a resolution as is mentioned in subsection (1) and the director concerned makes in relation to it representations in writing to the credit union (not exceeding a reasonable length) and requests their notification to the members of the credit union, the credit union shall, subject to subsection (5), (unless the representations are received by it too late to do so)—

(a) in any notice of the proposed resolution given to members of the credit union, state the fact of the representations having been made; and

(b) send a copy of the representations to every member of the credit union to whom notice of the meeting is sent (whether before or after the credit union receives the representations).

(4) Subject to subsection (5), and whether or not copies of any representations made by him have been sent as mentioned in subsection (3), the director concerned may require that, without prejudice to his right to be heard orally, the representations made by him shall be read out at the special general meeting.

(5) Subsections (3) and (4) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the F146[Bank] is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by them are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

F147[(6) A vacancy arising from the removal of a director under this section shall be filled in accordance with section 53(15).]

56A. F148[Board committees.

56A.—(1) Subject to the other provisions of the Credit Union Acts 1997 to 2012 and any matter prescribed by the Bank, the board of directors of a credit union may cause any matter relating to its functions to be performed or carried out on its behalf by a committee, comprised entirely of directors or of a majority of directors, to act on behalf of the board of directors in respect of matters to be performed or carried out.

(2) A decision of the board of directors to cause any matter relating to its functions to be performed or carried out on its behalf under subsection (1) shall be taken at a meeting of the board.

(3) The Bank may prescribe that credit unions generally or any category or categories of credit union establish one or more of the following committees, all members of which shall be directors of the credit union:

(a) an audit committee;

(b) a risk committee;

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