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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State Partially repealed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

(4) Where a credit union is not required to establish a committee to which subsection (3) relates, the credit union—

(a) if such a committee is already in place when this section is first commenced, shall as soon as practicable thereafter decide whether or not the committee shall continue, or

(b) at any time after such commencement, it may decide voluntarily to establish such a committee if it considers it appropriate and proportionate to do so,

and the provisions of this section shall apply to the credit union, in respect of the committee so continued or established as if that committee were required to be established under subsection (3).

(5) A decision by the board of directors under subsection (1) shall be documented in writing by the board, which documentation shall include—

(a) the terms of reference for the committee including—

(i) identifying the subject matter of the area concerned and respective responsibilities of both the board of directors and the committee,

(ii) identifying the matters that may be decided by the committee and those that require the approval of the board,

(iii) a schedule of matters reserved for the board of directors that would otherwise be performed or carried out by the committee,

and

(b) the procedures for monitoring and documenting in writing the exercise of the matters to be carried out on behalf of the board.

(6) The board of directors shall appoint the members of each committee to which subsection (1) relates.

(7) A person appointed to a committee—

(a) shall hold office until the next general meeting at which an election is held for the board of directors, or such shorter period as may be specified at the time the person is appointed to the committee, and

(b) may be removed from the committee by a decision of the board of directors.

(8) When appointing members of a committee to which subsection (1) relates, the board of directors of a credit union shall ensure that—

(a) each committee has an appropriate balance and sufficiency of skills and expertise available to it to carry out the matters delegated to it, and

(b) where necessary, some or all of the members of the committee are prepared to undertake relevant training to enhance their skills and experience for the purpose of carrying out functions in the context of paragraph (a).

(9) For the purposes of a committee to which subsection (1) relates, the board of directors or, failing them, the committee concerned in consultation with the secretary of the credit union, shall appoint a secretary to the committee. The secretary to a committee shall perform the same functions to the committee as does the secretary to the credit union perform under subsections (3), (5), (7) and (8) of section 54.

(10) The members of a committee to which subsection (1) relates shall perform their functions as such members in a manner consistent with the exercise of functions by members of the board of the credit union, both collectively and individually, as if the committee were the board and accordingly, the provisions of section 54, other than subsection (1), that relate to the board shall, subject to any necessary modifications, apply to the committee.

(11) A committee to which subsection (1) relates shall be chaired in such manner as its terms of reference provide or, where not so provided, as the committee shall decide.

(12) The board of directors of a credit union—

(a) may establish such other committees as the directors consider appropriate, and

(b) shall have such other committees (if any) as may be prescribed by the Bank.

(13) In composing the membership of any committee under this section, the board of directors of a credit union shall endeavour to ensure that no one individual director is in a position to exercise excessive influence or control, in respect of the business affairs of the credit union, through membership of committees.

(14) Each committee shall, at least quarterly in every year, prepare and submit in writing to the board of directors a formal report on its activities and deliberations.]

56B. F149[Nomination committee.

56B.— (1) The board of directors of a credit union shall establish a committee (in this Act referred to as the "nomination Committee") whose members shall be elected in accordance with subsection (13).

(2) The nomination committee shall comprise F150[3 members or 5 members].

(3) Only members of the board of directors of a credit union F151[, other than a member of the board of directors who is also the manager of a credit union,] are eligible to serve on a nomination committee of the credit union.

(4) The nomination committee shall be responsible for the following:

(a) identifying candidates to be nominated for appointment to the board of directors;

(b) accepting nominations of candidates proposed to be appointed to the board of directors;

(i) candidates, for election by a general meeting, to be members of the board, and

(ii) if prescribed by the Bank for the purposes of section 53(15), at least such and so many candidates as may be required for consideration for appointment to fill vacancies on the board of directors;

(d) proposing an additional person to be a director of the credit union pursuant to section 95A(1);

(e) assisting the credit union in performing any obligations of the credit union under section 23 of the Central Bank Reform Act 2010 in relation to any candidates proposed to perform pre-approval controlled functions (as construed in accordance with section 22 of that Act);

(f) assisting the credit union in carrying out any checks which the credit union is undertaking to enable it to comply with its obligations under section 21 of the Central Bank Reform Act 2010;

(g) informing each prospective candidate by notice in writing, before he or she is proposed as a candidate in accordance with paragraph (c), of the time commitment expected from him or her in respect of his or her role as a director;

(h) ensuring that there is an appropriate succession plan in place for the board of directors;

(i) ensuring that each director is given adequate induction to his or her role on the board of directors so as to ensure he or she has sufficient appreciation of, and appropriate training about, the strategy, operations and performance of the credit union;

(j) ensuring that the induction process and training referred to in paragraph (i) occurs as soon as is practicable and in any event by no later than 6 months following a director’s F151[initial] appointment to the board of directors;

(k) arranging additional training, either individually or collectively, for the members of the board of directors during their respective terms of appointment to the extent that the nomination committee considers it necessary in order for the board of directors to make informed decisions;

(l) maintaining a record in writing of the periods of time during which a person has served as a member of the board of directors of the credit union.

(5) Every candidate to be nominated for appointment as a member of the board of directors of a credit union shall be proposed through the nomination committee of the credit union. No person shall otherwise be put forward for election or seek election at an annual general meeting or special general meeting of the credit union at which an election is held for members of the board of directors.

(6) The nomination committee shall ensure it receives nominations for appointment of persons as members of the board of directors of a credit union in time prior to any annual general meeting, or special general meeting at which an election is held for such members, so as to enable any requirements by or under Part 3 of the Central Bank Reform Act 2010 to be met in advance of those persons being nominated for appointment.

(7) In identifying prospective candidates under subsection (4)(a) and considering the proposing of candidates under subsection (4)(c), F150[the nomination committee shall consider the balance of gender, skills, experience and knowledge] on the current board of directors and any review undertaken under subsection (11).

(8) In considering the proposing of candidates under paragraph (4)(c), the nomination committee shall have regard to—

(a) the number of directors on the board of directors and the number of vacancies to be filled,

(b) whether potential conflicts of interest could arise from the appointment to the board of directors of a person if such person were duly nominated and appointed to the board, and

(9) Any potential conflict referred to in subsection (8) shall be brought to the attention of—

(a) where subsection (4)(c)(i) is relevant, the members of the credit union at the general meeting concerned, and

(b) where subsection (4)(c)(ii) is relevant, the directors of the board of directors of the credit union at the meeting of the board concerned.

(10) The nomination committee shall not propose appointments to the board of directors or allow appointments to proceed where conflicts of interest exist or could arise in a way which in its opinion could significantly affect the ability of the board of directors to operate in accordance with section 69(1).

(11) The nomination committee shall review the composition of the board of directors at least once a year for the purpose of identifying any deficiencies in the composition of the board. The review shall include determining whether or not there are any deficiencies in the balance of skills amongst the members of the board of directors and considering other matters relating to deficiencies that may be prescribed by the Bank.

(12) The nomination committee shall—

(a) formally review the membership of any person who is a member of the board of directors for more than the 12 years in aggregate permitted under this Part, and

(b) shall document the rationale for the continuance of such membership of that person.

(13)
(a) At a meeting of the board of directors of a credit union—

(i) which is held immediately after the organisation meeting, an annual general meeting or special general meeting at which an election is held for members of the board of directors, and

(ii) which is chaired by a member of the board oversight committee,

the board shall elect by secret ballot directors to fill such positions as are then vacant on the nomination committee.

(b) In the event of a casual vacancy on the nomination committee, the board of directors may by secret ballot elect a director to fill that vacancy until the next meeting at which, in accordance with paragraph (a), an election should be held to fill any vacancy in the nomination committee.]

57. Directors: supplemental provisions.

57.—(1) A register of directors shall be kept by the secretary of the credit union and signed by all the directors of a credit union each year after the annual general meeting of a credit union or, in the case of a director appointed to fill a casual vacancy, after his appointment.

F152[(2) In the event that the number of directors of a credit union falls to less than half the number specified in the registered rules, the secretary of the credit union shall forthwith notify the Bank F153[and, in the case of a credit union other than a corporate credit union, the board oversight committee of the credit union].]

(3) The acts of a director of a credit union shall be valid notwithstanding any defect in the appointment of the director which may be subsequently discovered.

F154[(4) Where any of the following events occurs—

(a) the secretary of the credit union has given notice under section 53(17) that all the directors of the credit union intend to resign on the same date,

(b) all the directors have been removed or suspended in accordance with section 96(1), or

F153[then, in the case of a credit union other than a corporate credit union, the secretary] shall convene a special general meeting of the credit union, within one month of the occurrence of the event in question, to elect a board of directors.]

(5) If the special general meeting referred to in subsection (4) is not convened in accordance with the provisions of that subsection, the F155[Bank] may convene such a special general meeting under section 92 (1)(b).

Supervisory Committee

58. Supervisory Committee.

58.—F156[…]

59. Supervisory Committee: procedural provisions.

59.—F157[…]

60. Functions of Supervisory Committee.

60.—F158[…]

61. Supervisory Committee: removal from office.

61.—F159[…]

62. Supervisory Committee: supplemental provisions.

62.—F160[…]

Officers

63. Officers: principal posts.

63.—F161[(1) At a meeting of the board of directors of a credit union—

(a) which is held immediately after the organisation meeting, an annual general meeting or special general meeting at which an election is held for members of the board of directors, and

F162[(b) which is—

(i) in the case of a credit union other than a corporate credit union, chaired by a member of the board oversight committee, and

(ii) in the case of a corporate credit union, chaired by a member of the board of directors,]

F162[the board of directors shall, subject to subsection (4A), elect] by secret ballot directors to fill such of the principal posts in the credit union as are then vacant; and, for the purposes of this section, the principal posts in a credit union are the posts of chair, vice-chair and secretary.]

(2) F163[…]

(3) In the event of a casual vacancy in a principal post, F162[the board of directors may, subject to subsection (4A),] elect a director to hold that post until the next meeting at which, in accordance with subsection (1), an election should be held to fill any vacancy in the principal posts.

(4) Without prejudice to subsection (3), if a principal post falls vacant or for any other reason there is no holder of a principal post, anything that is required or authorised to be done by the holder of that post may be done by a director authorised in that behalf by the board of directors.

F164[(4A) A manager appointed as a director pursuant to section 63A(6) shall not be eligible for election under subsection (1) or (3) or authorisation under subsection (4).]

F165[(5) The chair or secretary of a credit union shall notify the Bank in writing of the election, appointment, retirement, removal or resignation from office of chair, vice-chair, director, secretary, or committee member and the notification shall—

(a) be made within 14 days of the election, appointment, retirement, removal or resignation, and

(b) state the full name and address of the officer concerned.]

(6) F166[…]

63A. F167[Manager of credit union.

63A.—(1) The board of directors of a credit union shall appoint an individual to the role of manager of the credit union.

(2) The manager of a credit union shall be the chief executive officer of the credit union having responsibility for the day-to-day management of the credit union’s operations, compliance and performance and shall be responsible to the board of directors for the performance of his or her functions.

(3) Subject to the Credit Union Acts 1997 to 2012, any matters which the Bank may prescribe and other financial services legislation, the respective functions of, and the division of responsibilities between, the board of directors and the manager of a credit union shall be clearly established, formally documented in writing and approved by the board of directors.

(4) The functions of the manager of a credit union include the following:

(a) without prejudice to the exercise by the board of directors of its functions under subsection (1)(a) of section 55, preparing and proposing to the board of directors for debate, scrutiny and approval, strategies for the strategic plan that the board of directors are required to prepare and approve under that subsection;

(b) implementing the strategies agreed by the board of directors to the standards set out in the strategic plan or as otherwise required by the board of directors;

(c) updating the board of directors on the financial position of the credit union, including submitting to the board of directors on a monthly basis unaudited financial statements that set out the financial position of the credit union;

(d) appointing or causing to be appointed such and so many persons as employees or as voluntary assistants as the manager considers appropriate after consulting with the management team of the credit union;

(e) preparing or causing to be prepared such financial reports and returns as may be required by the auditor of the credit union;

(f) implementing the proper systems of internal control which the board of directors have approved;

(g) ensure that all cash is deposited in accordance with the instructions of the board of directors;

(h) such other matters as may be duly assigned to the manager by the board of directors.

(5) In appointing a person as manager of a credit union, its board of directors shall ensure that the person complies with all legal requirements (including requirements which the Bank may prescribe) to be appointed.]

F168[(6) Subject to subsection (7), the board of directors of a credit union may appoint the manager of the credit union to be a member of the board of directors for such term as they determine.

(7) Where a person appointed under subsection (6) ceases to be a manager of the credit union concerned, that person shall immediately upon such cessation cease to be a member of the board of directors of that credit union.]

64. Functions of treasurer.

64.—F169[…]

65. Credit officer and credit control officer.

F170[65.— (1) The board of directors may—

(a) approve the appointment of a person by the manager, other than a member of the board, a member of the credit control committee or a credit control officer, as a credit officer to work under the supervision of the credit committee, and

(b) assign to the credit officer the power to approve credit on its behalf—

(i) that is fully secured by the shareholding of the borrowing member or to an amount in excess of that shareholding, or

(ii) that qualifies as emergency credit within such definitions and limitations as to amount, the terms of repayment and security required for emergency credit as may be established in writing by the board of directors,

and the amount of the excess referred to in paragraph (b)(i), shall be determined from time to time by the board of directors.

(2) F171[…]

(3) Where the board of directors has assigned the power to approve credit under subsection (1)(b), a credit officer shall enquire into the character and financial circumstances of an applicant for credit and the security offered, if any, in order to—

(a) ascertain the applicant’s ability to repay a loan in accordance with its terms, and

(b) ensure that the provision of credit does not involve undue risk to members’ savings.

(4) The Board may approve the appointment of a person by the manager, other than a member of the board, a member of the credit committee or a credit officer, as a credit control officer to assist the credit control committee and work under its supervision and control.]

66. Officers: suspension and removal by Supervisory Committee.

F172[66.— (1) If the board oversight committee of a credit union considers that a member of the board of directors has taken any action or decision which, in the opinion of the committee, given in writing to the director concerned, is not in accordance with the requirements of this Part, then, F173[after notifying the Bank], the committee may either—

(a) suspend, with immediate effect, the director by a unanimous vote of all the members of the committee taken at a meeting of the committee called for the purpose of considering the director’s suspension, or

(b) convene a special general meeting of the credit union to consider whether to remove the director in light of the action or decision taken by that director,

but no steps shall be taken under this subsection without the director concerned being given an opportunity to be heard by the members of the board oversight committee.

F173[(2) Where a director of a credit union has—

(a) been suspended by the board oversight committee in accordance with subsection (1), and

(b) within 7 days of that suspension, notified the board oversight committee, in writing, that he or she is aggrieved by the suspension,

the board oversight committee shall ensure that the secretary of the credit union issues, within 14 days of that notification, a notice of a special general meeting—

(i) for the purpose of reviewing the suspension, and

(ii) to consider whether to remove the director having regard to the action or decision taken by that director.]

(3) Where the board oversight committee convenes a special general meeting for the purposes of this section the credit union may, by resolution of a majority of the members present and voting at that special general meeting—

(a) ratify the suspension of the director concerned and remove that director from office,

(b) rescind the suspension of that director, or

but no director shall be so removed from office without being given an opportunity to be heard by the members present at the meeting.

(4) The secretary of the credit union 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 (3), give written notice of that meeting to the director concerned.

(5) Where notice is given of an intended resolution to remove a director under this section and the director concerned makes in relation to it representations (not exceeding a reasonable length) in writing to the credit union and requests their notification to the members of the credit union then, unless the representations are received by it too late for it to do so, the credit union shall, subject to subsection (7)—

(a) in any notice of the 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.

(6) Subject to subsection (7), and whether or not copies of any representations made by it have been sent as mentioned in subsection (5), the director concerned may require that, without prejudice to his or her right to be heard orally, the representations made by him or her shall be read out at the special general meeting.

(7) Subsections (5) and (6) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Bank is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by those sections are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

(8) Where a director of a credit union is removed from office at a special general meeting pursuant to this section, the vacancy caused by the removal shall be filled in such manner as may be determined by the meeting.]

F174[General governance requirements]

66A. F175[Governance arrangements in credit unions.

66A.— (1) A credit union shall have governance arrangements which shall—

(a) be such as to ensure that there is effective oversight of the activities of the credit union, taking into consideration the nature, scale and complexity of the business being conducted,

(b) include a clear organisational structure with well-defined, transparent and consistent reporting lines,

(d) be communicated in writing to all officers in the credit union, and

(e) be subject to regular internal review by the board of directors on, at a minimum, an annual basis.

(2) A credit union shall have in place the oversight, policies, procedures, practices, systems, controls, skills, expertise and reporting arrangements to ensure compliance with the requirements set out in this Part.]

66B. F176[Remuneration policies and practices.

66B.— A credit union shall put in place remuneration policies and practices which shall be consistent with and promote sound and effective risk management.]

66C. F177[Reporting to Bank.

66C.— F178[(1) A credit union shall submit an annual compliance statement to the Bank certifying its compliance with the requirements of this Part and the regulations, if any, made in respect of a matter to be prescribed under this Part by the Bank.]

F179[(1A) The Bank may prescribe the form and content of the annual compliance statement referred to in subsection (1).]

(2) The annual compliance statement referred to in subsection (1) shall be submitted by a credit union to the Bank within 2 months of the end of each financial year of the credit union, or with such other frequency as the Bank may notify to the credit union from time to time.]

General provisions

67. Credit, credit control and membership committees.

67.— F180[(1) Without prejudice to section 56A, the board of directors shall appoint—

(a) a credit committee, which shall decide on applications for credit;

(b) a credit control committee, which shall seek to ensure the repayment of loans by members of the credit union in accordance with their loan agreements; and

F181[(c) a membership committee which shall determine applications for membership of the credit union that have been rejected under a process referred to in section 17(9);]

and the Third Schedule shall apply to the committees.]

(2) The record of applications for credit furnished by a credit officer under section 65 (2) shall be considered by the credit committee at its next following meeting and become part of the records of the credit union.

(3) F182[…]

68. Limitation of remuneration.

68.—F183[(1) A credit union shall not pay any remuneration, directly or indirectly, to—

(a) a director of the credit union, or

(b) a member of the board oversight committee F184[…] of the credit union,

for any service performed by that person in that capacity.]

(2) Nothing in subsection (1) shall be regarded as prohibiting the payment (or reimbursement) of expenses—

(a) which are necessarily incurred by a director or committee member in the course of performing any service on behalf, or for the benefit, of the credit union; and

F185[(b) which are approved by at least 2 directors (not including the director whose expenses are being approved).]

(3) Nothing in subsection (1) shall be regarded as prohibiting any officer F186[…] of a credit union, acting not as such but in his professional capacity, from tendering for the supply of, and if successful supplying, goods or services to the credit union.

(4) F187[…]

69. Conflicts of interest.

F188[69.— (1) Officers of a credit union, including the members of its board of directors, shall at all times ensure that individually, and collectively when acting in that capacity, they act in a manner free from conflicts of interest.

(2) The board of directors of a credit union shall approve and document in writing a policy for identifying, managing and resolving conflicts of interest and which policy will apply to all officers of a credit union.

(3) Every officer of a credit union shall identify all potential conflicts between his or her own interests and the interests of the credit union and shall take all necessary steps to ensure his or her role in the credit union is not influenced by any other interest.

(4) An officer of a credit union shall not, in any manner, directly or indirectly, participate in the consideration or determination of any matter which he or she, or a body with which he or she is connected, has a pecuniary interest or other conflict of interest or where a reasonably perceived conflict of interest exists and, accordingly, an officer shall withdraw from any meeting or part of the meeting during which such a matter is to be considered or determined.

(5) If, apart from this section, the withdrawal of an officer from a meeting in pursuance of subsection (4) would cause the meeting to become inquorate, the remaining members shall be treated as constituting a quorum while the matter in question is being considered or determined.

(6) An officer of a credit union who is or becomes interested, directly or indirectly, in—

(a) a contract that is made or proposed to be made by the credit union or proposed to be amended by the credit union,

(b) any matter prescribed by the Bank for the purposes of this section, or

then the officer shall declare the nature of his or her interest—

(i) where that officer is the chair of the board of directors, in writing to the board of directors and served on the secretary,

(ii) where that officer is the secretary, in writing to the board of directors and served on the chair,

(iii) where that officer is any other member of the board of directors, in writing to the board of directors and served on the secretary and the chair,

(iv) where that officer is the manager, in writing to the board of directors and served on the secretary, or

(v) in any other case, in writing to the board of directors and the manager and served on the secretary,

as soon as possible after the contract is so made or proposed to be made or so proposed to be amended or, as the case may be, after he or she becomes so interested.

(7) In the case of a declaration under subsection (6) by a member of the board of directors—

(a) where the contract or matter concerned comes before a meeting of the board, the declaration shall also be made in person by the member (if present) at the meeting at which the contract or matter is to be considered, and

(b) in every other case, the secretary shall read the declaration made in writing under paragraph (i) or (ii) (as the case may be) of subsection (6) at the next meeting of the board of directors held after service of that declaration.

(8) Subject to subsection (9), for the purposes of this section, a general notice in writing which is served by an officer of the credit union on the appropriate person to whom paragraph (i), (ii), (iii), (iv) or (v) of subsection (6) would relate if a declaration were served under that subsection and which is to the effect that—

(a) the officer is connected (whether as member, director, employee or otherwise) with a specified body and is regarded as interested in any contract, or other matter to which subsection (6) relates, which, after the date of the notice, may be made with or relate to that body; or

(b) the officer is to be regarded as interested in any contract, or other matter to which subsection (6) relates, which, after the date of the notice, may be made with or relate to a specified person who is connected with him or her,

shall be deemed to be a sufficient declaration of interest in relation to any such contract or other matter.

(9) In the case of a general notice under subsection (8) and to which paragraph (i), (ii) or (iii) of subsection (6) relates, notice under subsection (8) may be given—

(a) by the director concerned in person at a meeting of the board of directors, or

(b) where the director concerned is the chair, in accordance with paragraph (i) of subsection (6) or where the director concerned is the secretary, in accordance with paragraph (ii) of that subsection, or, where the director concerned is any other director, in accordance with paragraph (iii) of that subsection,

and where a notice is given as mentioned in paragraph (b), the secretary shall read the notice at the next meeting of the board of directors.

(10) For the purposes of this section—

(a) this section applies in relation to a transaction, arrangement or proposal in the same manner as it applies in relation to a contract, and

(b) an officer of a credit union shall be regarded as connected with a particular body if the officer has an interest in the body, whether directly or indirectly and whether as a member, director, employee, shareholder or otherwise.

(11) Within 3 working days after a declaration or notice under this section is made or given, the secretary or manager (as the case may be) of the credit union concerned shall cause a copy of the declaration or notice to be entered in a register kept for that purpose, and that register shall—

(a) be open for inspection without charge by any officer, auditor or member of the credit union or the internal audit function, and

(b) be available at every general meeting of the credit union and, if adequate notice in advance is given to the secretary by any director, at any meeting of the board of directors.

(12) In the case of a member of the board of directors of a credit union, where recurring or ongoing conflicts of interest arise for the member, then—

(a) where the member concerned is the chair, seek formal or informal guidance from some or all of the other directors, and

(b) where the member concerned is not the chair, seek formal or informal guidance from the chair,

as to whether it is appropriate to resign and, following the consideration of such guidance by the member concerned, he or she shall resign as a member of the board of the credit union if he or she considers it appropriate to do so in the circumstances.]

70. Required signatories etc.

70.—(1) None of the documents specified in subsection (2) shall be effective in law to bind a credit union unless signed by at least two officers of the credit union, one of whom shall be a member of the board of directors.

F189[ (2) The documents to which subsection (1) applies are any of the following, so far as not required by law to be under the seal of a credit union—

(a) a conveyance or transfer of property of any description by a credit union; and

(b) any other document which does not fall within section 55(1)(o)(vi) but by which a credit union enters into an obligation of any description.]

(3) If the rules of a credit union make provision as to the officers by whom documents to which subsection (1) applies are to be signed, a document which purports to be signed as required by that subsection shall not be invalid by reason of any failure to comply with any such provision of the rules.

(4) The provisions of this section are without prejudice to any additional provisions as to signatures imposed by the F190[Bank] by way of condition under section 49.

71. Confidentiality of information.

71.—(1) Subject to subsection (2), during his term of office or at any time thereafter, an officer F191[…] of a credit union shall not disclose or permit to be disclosed any information which concerns an account or transaction of a member with, or any other business of, the credit union.

(2) Subsection (1) does not apply to a disclosure of information—

(a) if or to the extent that it is necessary for the proper conduct of the business of the credit union; or

(b) which is required by a court in connection with any proceedings; or

(c) which is made with the consent of the person to whom the information relates and, where not the same person, of the person from whom the information was obtained; or

(d) which, in a case where the credit union is acting or has acted as agent for a person, is made to that person in respect of that capacity; or

(e) where the information is in the form of a summary or collection of information and is so framed as not to enable information relating to a particular member to be ascertained from it; or

(f) which, in the opinion of the F192[Bank], is necessary for the protection of the funds of shareholders in or depositors with the credit union or to safeguard the interests of the credit union; or

F193[(g) which is made to the Bank for the purposes of its functions in relation to credit unions; or

(h) which is made to the Credit Union Restructuring Board for the purposes of its functions under the Credit Union and Co-operation with Overseas Regulators Act 2012.]

(3) As soon as practicable after the beginning of his term of office or, in the case of any person whose term of office began before the commencement of this section, after that commencement, every officer F194[…] of a credit union shall, in such manner as the F192[Bank] may determine—

(a) be informed by the credit union of his obligations under this section; and

(b) in writing acknowledge that he has been so informed and understands his obligations.

(4) Any reference in the preceding provisions of this section to a term of office means—

(a) in relation to an officer who is an employee, the period of his employment; and

(b) in relation to a voluntary assistant, the period during which he is engaged in the operation of the credit union.

(5) A person who contravenes subsection (1) shall be guilty of an offence.

(6) In any proceedings for an offence under this section, the onus of proving that any of the paragraphs of subsection (2) excludes a disclosure from subsection (1) shall lie on the person who made or permitted the disclosure.

72. Persons disqualified from acting.

72.—F195[(1) A person who has been adjudicated bankrupt and whose bankruptcy still subsists or F196[who, in the previous 10 years, has been convicted] of an offence in relation to a credit union or an offence involving fraud or dishonesty shall not—

(a) sign an application form for the registration of a society as a credit union,

(b) be qualified to be appointed or to act as an officer, auditor, receiver or liquidator of a credit union,

(d) permit his or her name to be put forward for election or appointment to any of the positions referred to in paragraph (b).]

F197[(2) If a person who is a member of—

(a) the board of directors,

(b) the board oversight committee, or

of a credit union is adjudicated bankrupt or convicted of such an offence as is referred to in subsection (1), then such person shall forthwith cease to hold office and the vacancy thereby created shall be deemed to be a casual vacancy and be filled accordingly.]

(3) A decision of the board of directors of a credit union shall not be affected by the presence at a meeting of the board of a person who, by virtue of this section, is disqualified from being a director; but any vote which such a person purports to cast shall be disregarded.

(4) Any person who, in relation to a credit union, purports to act in a manner or capacity which, by virtue of his being disqualified under this section, he is prohibited from doing shall be guilty of an offence.

73. Giving of security by officers etc.

73.—F198[…]

74. Duty to account.

74.—(1) Whenever required to do so in accordance with subsection (2), every officer F199[…] of a credit union who has the receipt or charge of money on behalf of the credit union shall—

(a) render such an account as may be required by the credit union or its board of directors;

(b) pay over all such money and deliver all such property of the credit union for the time being under his custody or control to such person as the credit union or its board of directors may appoint.

(2) Either or both of the requirements in subsection (1) shall arise—

(a) on demand; or

(b) on the service on the officer F200[…] of a notice in writing imposing the requirement or, as the case may be, both of the requirements;

and the requirement in paragraph (a) of that subsection shall also arise at such times as may be determined under the rules of the credit union.

(3) After the death of an officer F201[…] of a credit union, references in subsections (1) and (2) to the officer or voluntary assistant shall be taken to include references to his personal representatives.

F202[(4) If any person fails to comply with a requirement under subsection (1), the Circuit Court, on the application to it of the credit union, may make an order requiring that person to comply with the requirement.]

(5) The jurisdiction of the Circuit Court under subsection (4) shall be exercised by the judge for the time being assigned to the circuit in which the registered office of the credit union is situated.

75. Register of members and officers.

75.—(1) Every credit union shall keep at its registered office a register in which shall be entered—

(a) the membership numbers, names and addresses of its members;

(b) a statement of the number of shares and amount of deposits held by each member and, if the shares are distinguished by numbers, the numbers of the shares so held;

(d) the date at which the name of any person was entered in the register as a member;

(e) the date at which any person ceased to be a member; and

F203[(f) the membership numbers, names and addresses of the officers of the credit union (excluding any person who is an officer solely by virtue of being an employee or a voluntary assistant), with the offices held by them respectively, the dates on which they assumed office and, where applicable, on which they ceased to hold office.]

(2) The register may be kept either by making entries in bound books or by recording the matters in question in any other manner; but, where the register is not kept by making entries in a bound book but by some other means, adequate precautions shall be taken for guarding against, and facilitating the discovery of, any falsification.

(3) Every credit union shall either—

(a) keep at its registered office, for the purposes of inspection under section 76, an abbreviated register, containing the particulars in the register kept under subsection (1), excluding those entered under paragraph (b) or paragraph (c) of that subsection; or

(b) so construct the register kept under subsection (1) that it is possible to open to inspection the particulars in the register, excluding those entered under paragraph (b) or paragraph (c) of that subsection and without exposing the particulars so entered.

(4) Where a credit union keeps a register pursuant to subsection (1) by recording the matters in question in any manner other than by making entries in bound books, the credit union shall keep at a place other than its registered office a duplicate register containing the particulars in the register kept under subsection (1).

F204[(5) The Bank or a person acting on its behalf may at all reasonable hours inspect any particulars in any register or duplicate register kept under this section.]

(6) A credit union's register or duplicate register kept under this section, or any other register or list of members or shares kept by the credit union shall be prima facie evidence of any of the following particulars entered therein, that is to say—

(a) the membership numbers, names and addresses of members;

(b) the number of shares and the amount of deposits respectively held by the members, and the distinguishing numbers of those shares if they are distinguished by numbers;

(d) the date at which any person ceased to be a member.

(7) A credit union shall ensure that a register or duplicate register kept under this section is up to date and, in particular, shall ensure that, if an event occurs which gives rise to the need for the making of an entry in, a change to or a deletion from, the register, that entry, change or deletion is made within 28 days of the event in question.

(8) F205[…]

76. Inspection of books.

76.—(1) Notwithstanding anything in the rules of a credit union, except as provided by this Act or any other enactment, no-one (whether a member of the credit union or not) shall have the right to inspect the books of a credit union.

(2) F206[…]

(3) The rules of a credit union may make provision for the disclosure of its books and documents for the purpose of enabling it to enter into contracts for the benefit of the credit union.

(4) Subject to subsection (5), on the application of thirty members of a credit union, the F207[Bank] may appoint an accountant to inspect and report on the books and documents of the credit union.

(5) An application under subsection (4) shall contain such particulars as the F207[Bank] may require and shall not be valid unless—

(a) each of the members making the application has been a member throughout the whole of the twelve months immediately preceding the date of the application; and

(b) the members making the application deposit with the F207[Bank] as security for the costs of the proposed inspection such sum as the F207[Bank] may reasonably require.

(6) An accountant appointed under subsection (4) may make copies of, and take extracts from, any books or documents of the credit union at all reasonable hours at the credit union's registered office or at any other place where those books or documents are kepart

(7) All expenses of and incidental to an inspection by an accountant appointed under subsection (4) shall be defrayed in such proportions as the F207[Bank] may direct—

(a) by the members making the application;

(b) out of the funds of the credit union; and

F208[(c) by the members or officers (other than any person who is an officer solely by virtue of being a voluntary assistant) or former members or officers (other than any person who was an officer solely by virtue of being a former voluntary assistant) of the credit union.]

(8) The F207[Bank] shall make known the results of an inspection by an accountant appointed under subsection (4) to the members who made the application and to the credit union.

F210[Additional requirements for credit unions]

76A. F211[Strategic plan.

76A.— (1) The board of directors of a credit union shall cause to be prepared and shall adopt a plan (in this Act referred to as a ‘strategic plan’) which documents the strategy and objectives of the credit union (in this Act referred to as the ‘strategic objectives’) and indicates how those strategic objectives are to be achieved.

(2) A strategic plan shall include—

(a) the objectives of the credit union’s activities for a specified period of at least 3 years,

(b) the nature and scope of the activities to be undertaken,

(d) the targets and criteria for assessing the performance of the credit union,

(e) the financial projections for the credit union for a specified period of at least 3 financial years from, and including, the current financial year together with the supporting financial analysis and assumptions made,

(f) the funding strategy proposed to support the projected balance sheet structure, and

(g) such other matters as may be prescribed by the Bank.

(3) A credit union shall maintain adequate resources, both financial and non-financial, in relation to the nature, scale, complexity and risk profile of the activities being undertaken or to be undertaken in accordance with the strategic plan.]

76B. F212[Risk management systems and systems and control.

76B.— (1) In this section—

"compliance programme", in relation to a credit union, means the policies, procedures, systems and plans the credit union puts in place to monitor compliance, on an ongoing basis, with its obligations including requirements under all legal and regulatory requirements;

"risk management system", in relation to a credit union, means the sum of those components that provide the basis (including organisational arrangements) for designing, implementing, monitoring, reviewing and continually improving risk management processes throughout the credit union;

"systems and controls", in relation to a credit union, means a set of arrangements designed to provide reasonable assurance regarding the achievement of objectives in relation to the effectiveness and efficiency of operations, reliability of financial reporting and compliance with all legal and regulatory requirements.

(2) A credit union shall develop, implement, document and maintain a risk management system with such governance arrangements and systems and controls to allow it to identify, assess, measure, monitor, report and manage the risks which it is, or might reasonably be, exposed to.

(3) The risk management system—

(a) shall be clearly set out and documented, and

(b) shall clearly set out the related tasks and responsibilities within the credit union.

(4) A credit union shall develop, adopt, implement, monitor, document and maintain systems and controls to manage and mitigate the risks identified by the risk management system.

(5) A credit union shall develop, implement, document and maintain a compliance programme that allows it to evaluate compliance with its obligations F213[…] including compliance with all legal and regulatory requirements.]

76C. F214[Risk management officer.

76C.— (1) The board of directors of a credit union shall appoint a person (in this Act referred to as a "risk management officer") with the necessary authority and resources to manage the risk management function within the credit union.

(2) Except where subsection (3)(a) applies or where otherwise prescribed by the Bank under subsection (3)(b), nothing in this section shall be read as preventing the appointment of a person as risk management officer of a credit union who—

(a) holds another position as an officer in the credit union, or

(b) is the risk management officer for one or more than one other credit union.

(3) The risk management officer of a credit union shall not—

(a) be a director, a member of the board oversight committee or the auditor of the credit union, or

(b) hold such other position (whether within the credit union or otherwise) that the Bank may prescribe as being inappropriate to hold while being a risk management officer.

(4) The risk management officer of a credit union shall be responsible for identifying, assessing, reporting and monitoring all internal and external risks that could affect the credit union to which the risk management system referred to in section 76B relates, including risks to its employees, members, reputation and assets, and assisting the manager with managing and mitigating those risks.

(5) The board of directors of a credit union shall ensure that the risk management officer—

(a) has clearly documented reporting lines to the board,

(b) has access to the board,

(c) is independent in the exercise of his or her functions and, subject to paragraph (d), shall be free from influence, and

(d) is subject to internal oversight by the internal audit function.

(6) The board of directors of a credit union shall ensure that the role and functions of the risk management officer are documented in writing and include any role or function that may be prescribed by the Bank or be otherwise duly provided for by the Bank under any other enactment.]

76D. F215[Compliance officer.

76D.— (1) The board of directors of a credit union shall appoint a person (in this Act referred to as a "compliance officer") with the necessary authority and resources to manage the compliance programme, as provided for by section 76B, within the credit union.

(2) Except where subsection (3)(a) applies or where otherwise prescribed by the Bank under subsection (3)(b), nothing in this section shall be read as preventing the appointment of a person as compliance officer of a credit union who—

(a) holds another position as an officer in the credit union, or

(b) is the compliance officer for one or more than one other credit union.

(3) The compliance officer of a credit union shall not—

(a) be a director, a member of the board oversight committee or the auditor of the credit union, or

(b) hold such other position (whether within the credit union or otherwise) that the Bank may prescribe as being inappropriate to hold while being a compliance officer.

(4) The compliance officer of a credit union shall be responsible for managing compliance at all levels in the credit union including—

(a) ensuring that the credit union complies with all statutory and regulatory requirements, and

(b) monitoring such compliance to ensure that no conflict of interest arises.

(5) A credit union shall ensure that the compliance officer—

(a) has clearly documented reporting lines to the board,

(b) has access to the board,

(c) is independent in the exercise of his or her functions and, subject to paragraph (d), shall be free from influence, and

(d) is subject to internal oversight by the internal audit function.

(6) The board of directors of a credit union shall ensure that the role and functions of the compliance officer are documented in writing and include any role or function that may be prescribed by the Bank or be otherwise duly provided for by the Bank under any other enactment. ]

76E. F216[Operational risk.

76E.— (1) In this Act "operational risk", in relation to a credit union, means the risk of loss (financial or otherwise) resulting from—

(a) inadequate or failed internal processes or systems of the credit union,

(b) any failure by persons connected with the credit union,

(d) external events,

but does not include reputational risk.

(2) A credit union shall identify the operational risks it is exposed to, or is likely to be exposed to, and provide for the management and mitigation of those risks in the credit union’s risk management system as provided for by section 76B.]

76F. F217[Records management.

76F.— (1) Without prejudice to sections 108 and 109, a credit union shall ensure—

(a) that it makes, maintains and retains in books and documents proper and secure records of all matters that are required to enable the credit union, including the board of directors, board committees, nomination committee and officers and its board oversight committee and auditor to discharge their respective functions and as required by law,

(b) that those records are made in a timely, accurate and consistent manner so that—

(i) they contain the information necessary to enable persons discharging functions to which paragraph (a) relates to discharge their respective functions and that those records are sufficiently accurate and available with sufficient regularity and sufficient promptness for the purpose of so discharging, and

(ii) any information furnished or caused to be furnished by or on behalf of the credit union to the Bank is sufficiently accurate for the purposes for which it was so furnished and is available as and when required by the Bank,

and

(i) by or under this Act, or

(ii) for the purposes of any other statutory obligation to produce them.]

76G. F219[Information systems.

76G.— (1) In this section "information systems", in relation to the business of a credit union, means all the technical and non-technical methods of establishing, implementing, documenting and maintaining data and information within the credit union in a coherent and informative way which is in, or capable of being reproduced in, a legible form.

(2) For the purpose of supporting the strategic plan and enabling the board of directors of a credit union and other persons involved in the management of the credit union to control, direct and manage its affairs, a credit union shall, taking account of the nature, scale and complexity and risk profile of its business but without prejudice to any other statutory obligation to the like effect as this section—

(a) develop, prepare, implement and maintain secure and reliable information systems, or

(b) where such systems already exist within the credit union, continue to implement and maintain such systems.]

76H. F220[Management information.

76H.— Without prejudice to any other statutory obligation to the like effect as this section, a credit union shall ensure that its information systems (within the meaning of section 76G) produce management information and other reports that are accurate, reliable, consistent, and timely so as to enable the board of directors and management team to—

(a) direct, control and manage the credit union’s business efficiently and effectively,

(b) make informed strategic and operational decisions, and

76I. F221[Business continuity plan.

76I.— (1) In this section—

"business continuity", in relation to the occurrence of one or more abnormal events which could cause a material interruption to the business of a credit union, means the continuation of its business during and after such an occurrence;

"business continuity plan", in relation to a credit union, means the contingency arrangements put in place to ensure that its essential functions can continue during and after the occurrence of one or more abnormal events which could cause a material interruption to the business of the credit union.

(2) A credit union shall put in place a business continuity plan—

(a) to ensure its business continuity if there occurs one or more abnormal events which could cause a material interruption to its business, and

(b) to enable it to continue to meet all requirements imposed on it under the Credit Union Acts 1997 to 2012 and other financial services legislation if any such interruption occurs,

and such plan shall include, where appropriate, comprehensive testing at regular intervals of recovery procedures by officers of the credit union and testing of backup facilities.]

76J. F222[Outsourcing.

76J.— (1) Subject to the other provisions of this section, a credit union may by an agreement in writing entered into with any person (in this section referred to as a "service provider") and upon such terms and conditions as may be specified in the agreement, provide for the performance by that person, subject to such terms and conditions (if any) as may be so specified, of such process, service or activity (in this section referred to as "outsourced activities") of the credit union as may be so specified.

(2) The respective rights and obligations of the credit union and of the service provider shall be clearly allocated and set out in a written agreement.

(3) A credit union shall exercise due skill, care and diligence when entering into, managing or terminating any outsourced activities with a service provider.

(4) A credit union shall not enter into an agreement with a service provider for the performance of any of the functions exercisable by the board of directors of the credit union under section 55(1) but, subject to any matter that may be prescribed by the Bank, this shall not prevent the credit union from entering into an agreement under subsection (1) with a service provider for the provision of services in respect of any business activity (other than any such function) that is preliminary to or consequential upon the exercise by that board of the function concerned.

(5) The following conditions shall form part of every agreement to provide outsourced activities between a credit union and a service provider:

(a) the service provider has the ability, capacity and any authorisation required by law to perform those activities reliably and professionally;

(b) the service provider will carry out those activities effectively;

(c) the service provider shall properly supervise the carrying out of those activities, and adequately manage the risks associated with the outsourcing;

(d) appropriate action shall be taken by the credit union if it appears to it or to the Bank that the service provider may not be carrying out those activities effectively and in compliance with any applicable laws and regulatory requirements;

(e) the service provider shall disclose to the credit union any development that may have a material impact on its ability to carry out the outsourced activities effectively and in compliance with applicable laws and regulatory requirements;

(f) the credit union may terminate the arrangement for outsourcing, where necessary, without detriment to the continuity and quality of its provision of services to members;

(g) the service provider shall, when required, co-operate with the Bank in connection with the outsourced activities;

(h) the credit union, its auditors and the Bank shall have effective access to data related to the outsourced activities, as well as to the business premises of the service provider;

(i) the Bank shall have without notice the right of access to the business premises of the service provider for the purposes of paragraph (g);

(j) the service provider shall keep any confidential information relating to the credit union or its members in a safe and secure manner.

(6) For the purposes of every agreement to provide outsourced activities between a credit union and a service provider, the credit union shall—

(a) ensure that the service provider has no conflicts of interest in relation to the outsourced activity,

(b) retain the necessary expertise to supervise the outsourced activities effectively, manage the risks associated with the outsourcing and supervise those activities and manage those risks,

(d) be capable of resuming direct control over any outsourced activity or ensure that alternative arrangements are in place to provide the outsourced activities without detriment to the proper operation and functioning of the credit union or the continuity and quality of its provision of services to members.

(7) Where—

(a) an agreement under this section has been entered into between a credit union and a service provider, and

(b) it is necessary having regard to the activities that have been outsourced,

then the credit union and the service provider shall both establish, implement and maintain a business continuity plan and the credit union shall ensure that such plan is integrated, as necessary, within the business continuity plan referred to in section 76I.

(8) An outsourced activity shall not impair—

(a) the orderliness of the conduct of the credit union’s business,

(b) the credit union’s ability to manage and monitor its business,

(d) the ability of the credit union to comply with requirements imposed under financial services legislation,

(e) the supervision of the credit union by the Bank, and

(f) the quality of the credit union’s internal controls.

(9) Where a credit union has outsourced activities, the credit union remains legally responsible for compliance with requirements imposed under financial services legislation in respect of those activities.

(10) Nothing in this section shall be construed—

(a) as applying to any person in his or her capacity as an officer of the credit union, or

(b) as affecting any contract (whether oral or in writing) entered into between the credit union and any person for the performance by that person of any minor non-business activity where a defect or failure in its performance could not impair—

(i) the continuing compliance with the conditions and obligations of the credit union’s registration or its other obligations under the financial services legislation,

(ii) the credit union’s financial performance,

(iii) the soundness or continuity of the credit union’s financial performance, or

(iv) the soundness or continuity of the credit union’s business.

(11)
(a) A credit union shall notify the Bank, in writing—

(i) when it is proposed to outsource to a service provider a material business activity, or

(ii) of any material development affecting the service provider F223[and the service provider’s ability] to fulfil its obligations.

(b) In this subsection and subsection (12) "material business activity" means an activity where a defect or failure inits performance would materially impair—

(i) the continuing compliance with the conditions and obligations of its registration or its other obligations under the financial services legislation,

(ii) its financial performance,

(iii) the soundness or continuity of its financial performance, or

(iv) the soundness or continuity of its business.

(12)
(a) The Bank may prescribe the matters that a credit union shall have regard to when selecting a service provider.

(b) Without prejudice to the generality of paragraph (a), requirements for the purposes of that paragraph may include any of the following:

(i) the formalities to be involved in engaging a service provider for the purposes of a proposed outsourced activity including, for the purposes of subsections (1) and (2), the nature and content of written agreements to be entered into between the credit union and the service provider prior to commencement of the outsourcing activity;

(ii) the arrangements for notifying the Bank in writing when a material business activity is proposed to be outsourced;

(iii) the arrangements for notifying the Bank in writing of a material development affecting a service provider and what constitutes a material development.

(13) 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.]

76K. F224[Internal audit.

76K.— (1) The board of a credit union shall appoint a person (in this Act referred to as the "internal audit function")—

(a) to provide for independent internal oversight, and

(b) to evaluate and improve the effectiveness,

of the credit union’s risk management, internal controls and governance processes.

(2) The internal audit function shall prepare, implement and maintain a document (in this Act referred to as the "internal audit charter") F225[which shall define]—

(a) the activities of the internal audit function within the credit union, and

(b) the scope of those activities,

and, relevant to the performance of its audits, shall authorise the access by the internal audit function to records, personnel and physical properties of the credit union. The internal audit charter shall be reviewed and modified in accordance with section 55(8).

(3) There shall be prepared by the internal audit function and approved by the board of a credit union or, where an audit committee exists for the credit union, by the audit committee with the agreement of that board, a written plan (in this Act referred to as an "internal audit plan") detailing the scope and objectives of audits, setting priorities as regards areas to be audited and determine the necessary resources required to implement the plan. The internal audit plan shall be reviewed and modified in accordance with section 55(8).

(4) The internal audit function shall be separate from other functions and activities of the credit union, and be capable of operating independently of management and without undue influence over its activities.

(5) The internal audit function shall report the results of its evaluations and recommendations to the audit committee, where one exists, or otherwise to the board of directors, on a regular basis, and at least quarterly.

(6)
(a) The Bank may prescribe the form and content of the internal audit charter and internal audit plan, and related matters.

(b) Without prejudice to the generality of paragraph (a), regulations may prescribe—

(i) the frequency and timing at which an examination of the records of the credit union is to be undertaken by the internal audit function, and

(ii) the nature of the records to be inspected for the purposes of subparagraph (i).

(7) The internal audit function shall have access, at all times, to the books and documents (including draft documents) of the credit union to enable it to carry out its functions under the Act.]

F226[PART IVA Board Oversight Committee]

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