Credit Union (Amendment) Act 2023

Type Act

Publication 2023-12-13

State In force

Source Irish Statute Book

1. Short title and commencement

1. (1) This Act may be cited as the Credit Union (Amendment) Act 2023.

(2) This Act shall come into operation on such day or days as the Minister for Finance may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

2. Definition

2. In this Act, “Principal Act” means the Credit Union Act 1997.

3. Amendment of section 2 of Principal Act (interpretation)

3. Section 2 of the Principal Act is amended, in subsection (1)—

(a) in the definition of “officer”, in paragraph (a), by the insertion of “a member of the appellate body referred to in section 37,” after “a member of the board oversight committee,”,

(b) by the insertion of the following definitions:

“ ‘Act of 2014’ means the Companies Act 2014;

‘company’ means a company formed and registered under the Act of 2014 or an existing company within the meaning of that Act;

‘corporate credit union’ means a credit union registered pursuant to section 6(6);

‘public body’ means—

(a) a Department of State,

(b) an entity established by or under any enactment (other than the Act of 2014 or a former enactment relating to companies within the meaning of section 5 of that Act),

(c) any other entity established (other than under the Act of 2014 or a former enactment relating to companies within the meaning of section 5 of that Act) or appointed by the Government or a Minister of the Government, including an entity established (other than under the Act of 2014 or a former enactment relating to companies within the meaning of section 5 of that Act) by a Minister of the Government under any scheme,

(d) a company a majority of the shares in which are held by or on behalf of a Minister of the Government,

(e) a subsidiary of a company to which paragraph (d) relates, or

(f) an entity (other than a subsidiary to which paragraph (e) relates) that is directly or indirectly controlled by an entity to which paragraph (b), (c), (d) or (e) relates;

‘subsidiary’ has the same meaning as it has in the Act of 2014;”,

and

“ ‘common bond’ means a common bond falling within subsection (3) or (7) of section 6;”.

4. Amendment of section 6 of Principal Act (conditions for registration as a credit union)

4. Section 6 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “Subject to subsection (6), a society may be registered” for “A society may be registered”,

(b) in subsection (2)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) the promotion of the accumulation of savings by its members;”,

(ii) in paragraph (d), by the substitution of “the use of money” for “the wise use of money”,

(iii) by the deletion of paragraph (e), and

(iv) in paragraph (f), by the substitution of “of the well-being of the members’ community; and” for “of the well-being and spirit of the members’ community; and”,

and

“(6) A society may be registered under this Act as a credit union where all of the members of the society are credit unions and the Bank is satisfied that each of the following conditions is fulfilled:

(a) the society is formed—

(i) for no object other than—

(I) to provide services to those credit unions and their members, and

(II) the objects specified in paragraphs (a) to (c) of subsection (2),

and

(ii) for no other purposes beyond those specified in paragraphs (d) to (g) of subsection (2);

(b) each of its members share the common bonds of a corporate credit union;

(d) the place which under those rules is, or is to be, the society’s registered office is in the State;

(e) it has in force (or will have in force if registered) such a policy of insurance as is required by section 47.

(7) The common bonds of a corporate credit union are—

(a) that each of its members is a credit union (other than a corporate credit union), and

(b) the additional qualifications, if any, which are stated in its rules to be required for admission to membership of the society.

(8) In ascertaining whether the members of a society share the common bonds of a corporate credit union, in a case in which the society has stated in its rules additional qualifications which are required for admission to membership of the society, the Bank shall have regard to those qualifications.

(9) A society registered in accordance with subsection (6) may promote collaboration between its members and enhance the services provided by its members to their members.

(10) Where a website is maintained by or on behalf of a credit union, the credit union shall publish, on the website maintained by it or on its behalf, as the case may be—

(a) a description of the common bond of the credit union, or

(b) where the common bond of the credit union is or includes that specified in paragraph (b) of subsection (3), a map on which the locality concerned is marked.

(11) Where no website is maintained by or on behalf of a credit union, the credit union shall include in its annual accounts—

(a) a description of the common bond of the credit union, or

(b) where the common bond of the credit union is or includes that specified in paragraph (b) of subsection (3), a map on which the locality concerned is marked.”.

5. Amendment of section 7 of Principal Act (application for registration as a credit union)

5. Section 7 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “Subject to subsection (1A), an application” for “An application”,

(b) by the insertion of the following subsection after subsection (1):

“(1A) An application for the registration of a society as a credit union pursuant to section 6(6) shall be made to the Bank and shall be signed on behalf of each credit union which is a member of the society by the secretary of each such credit union.”,

and

(c) in subsection (2), by the substitution of “An application under subsection (1) or (1A)” for “An application under subsection (1)”.

6. Amendment of section 13 of Principal Act (rules)

6. Section 13 of the Principal Act is amended, in subsection (1)—

(a) by the substitution of the following paragraph for paragraph (a):

“(a) in the case of a credit union, other than a corporate credit union, provisions with respect to the matters specified in the First Schedule,”,

and

(b) by the insertion of the following paragraph after paragraph (a):

“(aa) in the case of a corporate credit union, provisions with respect to the matters specified in the Sixth Schedule, and”.

7. Amendment of section 14 of Principal Act (amendment of registered rules)

7. Section 14 of the Principal Act is amended—

(a) by the substitution of the following subsection for subsection (2):

“(2) An amendment of the registered rules of a credit union shall not be valid until the amendment has been registered under this Act, for which purpose a copy of the amendment—

(a) in the case of a credit union other than a corporate credit union, signed by 4 members, one of whom shall be the secretary and another a director, and

(b) in the case of a corporate credit union, signed on behalf of not less than 2 members by the secretary of each of those members,

shall be sent to the Bank.”,

(b) by the substitution of the following subsection for subsection (4):

“(4) Except where the Bank is satisfied that an amendment of a credit union’s rules sent to it under subsection (2) is not in the interests of the proper and orderly regulation of the credit union, the Bank shall issue to the credit union, within 3 months of its receipt of the amendment, an acknowledgement of registration which, unless the contrary is proved, shall be sufficient evidence that the amendment is duly registered.”,

(c) in subsection (5), by the substitution of “in the interests of the proper and orderly regulation of the credit union” for “not contrary to the financial services legislation”, and

(d) by the insertion of the following subsections after subsection (8):

“(9) Notwithstanding anything in the rules of a credit union, the board of directors may, by resolution passed during the second transitional period, make such amendments of the rules of the credit union as may be consequential on the provisions of the Credit Union (Amendment) Act 2023.

(10) For the purposes of subsection (9), the second transitional period is the period of one year from the commencement of section 7(d) of the Credit Union (Amendment) Act 2023 or such longer period as may be determined by the Bank.

(11) Notwithstanding anything in subsection (4), after the expiry of one year from the commencement of section 7(d) of the Credit Union (Amendment) Act 2023, the Bank shall not be required to register any amendment of a credit union’s rules unless such consequential amendments of the registered rules as are mentioned in subsection (9) either—

(a) have been made before the Bank receives the amendment, or

(b) are to be effected by the amendment.”.

8. Amendment of section 15 of Principal Act (rules to bind members)

8. Section 15 of the Principal Act is amended—

(a) in subsection (1)—

(i) in paragraph (a), by the substitution of “subscribed the member’s name and affixed the member’s seal” for “subscribed his name and affixed his seal”, and

(ii) in paragraph (b), by the substitution of “claiming through the member” for “claiming through him”,

and

(b) in subsection (2)—

(i) by the substitution of “without the member’s consent” for “without his consent”,

(ii) by the substitution of “after they became a member” for “after he became a member”,

(iii) in paragraph (a)—

(I) by the substitution of “requires the member to subscribe” for “requires him to subscribe”, and

(II) by the substitution of “held by the member” for “held by him”,

(iv) in paragraph (b), by the substitution of “requires the member to pay” for “requires him to pay”, and

(v) in paragraph (c), by the substitution of “increases the member’s liability” for “increases his liability”.

9. Amendment of section 17 of Principal Act (requirements of, and qualifications for, membership)

9. Section 17 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “Subject to subsection (1A), the minimum number” for “The minimum number”,

(b) by the insertion of the following subsection after subsection (1):

“(1A) The minimum number of members of a corporate credit union at any time shall be 2.”,

(c) in subsection (2), by the substitution of “Subject to subsection (2A), membership of a credit union” for “Membership of a credit union”,

(d) by the insertion of the following subsection after subsection (2):

“(2A) Where a signatory to an application to register a society as a credit union has signed on behalf of a non-natural person, the non-natural person and not the signatory shall be the member of the credit union.”,

(e) in subsection (3), by the substitution of “unless the person has” for “unless he has”,

(f) in subsection (3A), by the substitution of “Subject to subsection (3B) and the rules of the credit union concerned” for “Subject to the rules of the credit union concerned”,

(g) by the insertion of the following subsection after subsection (3A):

“(3B) A member of a corporate credit union shall cease to be a member of the corporate credit union upon ceasing to be a credit union.”,

(h) in subsection (5), by the substitution of “a natural person” for “a person”,

(i) by the substitution of the following subsection for subsection (7):

“(7) Notwithstanding any other provision of this Act, a body (whether incorporated or unincorporated), other than a corporate credit union, may be admitted to, and retain membership of, a credit union, with the same rights and obligations as a natural person where—

(a) the majority of the members of the body are, and continue to be, eligible for membership of the credit union,

(b) the body has the common bond, set out in the rules of the credit union, in relation to the other members of the credit union, or

(i) the credit union, or

(ii) a category of credit unions to which the credit union belongs.”,

(j) by the insertion of the following subsections after subsection (7):

“(7A) For the purposes of ascertaining whether a body has the common bond referred to in paragraph (b) of subsection (7)—

(a) a body shall be treated as following a particular occupation where its business is that of a person following the occupation, and

(b) a body shall be treated as residing in a particular locality where it has a place of business in that locality.

(7B) The Minister may, following consultation with the Advisory Committee and such other bodies as appear to the Minister to be expert or knowledgeable in matters relating to credit unions, by order designate a public body as being eligible for membership of a credit union or a specified category of credit unions, which order shall specify the reasons for which the public body is so eligible.

(7C) The reasons referred to in subsection (7B) shall—

(a) where a credit union is specified in the order, be reasons relating to the common bond of the credit union, or

(b) where a category of credit unions is specified in the order, be reasons relating to the common bonds of credit unions falling within that category.”,

and

(k) by the insertion of the following subsection after subsection (8):

“(9) A credit union shall—

(a) in the case of a credit union registered before the commencement of section 9(k) of the Credit Union (Amendment) Act 2023, not later than 6 months after such commencement, and

(b) in the case of a credit union registered after such commencement, not later than 6 months after its registration,

put in place a process, approved by the board of directors, for the approval of applications for membership of the credit union.”.

10. Amendment of section 19 of Principal Act (expulsion and withdrawal from credit union)

10. Section 19 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “by a resolution for the member’s expulsion” for “by a resolution for his expulsion”, and

(b) by the substitution of the following subsection for subsection (6):

“(6) Subject to subsections (7) and (8), all moneys due in respect of withdrawable shares and deposits by a credit union to a member who withdraws or is expelled from the credit union shall be paid to the member after deduction of all moneys due from the member to the credit union; and the nominal value of non-withdrawable shares held by a member who is expelled (but not one who withdraws) may also be paid to the member (after deduction of all moneys so due).”.

11. Amendment of section 21 of Principal Act (nomination of property in credit union)

11. Section 21 of the Principal Act is amended—

(a) by the substitution of the following subsection for subsection (3):

“(3) For the purpose of the disposal of any property which is the subject of a nomination under subsection (1), if, on the date of the nominator’s death, the amount of the nominator’s property in the credit union comprised in the nomination exceeds the amount standing specified, on that date, for the purposes of this subsection in an order made by the Minister under subsection (10), the nomination shall be valid to the extent of the amount standing so specified, but not further or otherwise.”,

(b) by the insertion of the following subsections after subsection (7):

“(8) The signature of a person making a written statement referred to in subsection (1) shall be witnessed by 2 other persons.

(9) Each of the witnesses referred to in subsection (8) shall witness the signature of the person making the statement by applying the witness’s own signature to the statement.

(10) The Minister may, after consultation with the Advisory Committee and such other body as the Minister considers appropriate in the circumstances, by order specify an amount for the purpose of subsection (3).”.

12. Amendment of section 22 of Principal Act (proceedings on death of nominator)

12. Section 22 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “credit union” for “board of directors”, and

(b) in subsection (2), by the substitution of “credit union” for “board of directors”.

13. Amendment of section 23 of Principal Act (provision for small payments on death)

13.Section 23 of the Principal Act is amended—

(a) in subsection (1), by the substitution of the following paragraph for paragraph (a):

“(a) does not in the whole exceed the amount standing specified, on the date of the member’s death, for the purpose of this subsection in an order made by the Minister under subsection (2).”,

and

(b) by the substitution of the following subsection for subsection (2):

“(2) The Minister may, after consultation with the Advisory Committee and such other body as the Minister considers appropriate in the circumstances, by order specify an amount for the purpose of subsection (1).”.

14. Amendment of section 29 of Principal Act (transfer of shares)

14.Section 29 of the Principal Act is amended—

(a) in subsection (1), by the substitution of the following paragraph for paragraph (b):

“(b) if the credit union so requires in any case, the transfer has the approval of the credit union.”,

(b) by the substitution of the following subsection for subsection (3):

“(3) If, in a case where the credit union has imposed a requirement under subsection (1)(b), the credit union refuses to approve the proposed transfer of shares in the credit union by a member, the member may appeal against the refusal to a Judge of the District Court for the district in which the registered office of the credit union is situated.”,

and

15. Amendment of section 30 of Principal Act (dividends on shares)

15. Section 30 of the Principal Act is amended, in paragraph (a) of subsection (5), by the deletion of “(as ascertained under section 45)”.

16. Amendment of section 32 of Principal Act (restrictions on withdrawal of shares and deposits)

16.Section 32 of the Principal Act is amended—

⋯

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