Government To Raise Credit Union Deposit Limit
The Government has decided to raise the legal limit on the size of deposits that may be kept with a credit union from $40,000 to $250,000.
Acting Commerce Minister Trevor Mallard says raising the limit lets credit unions set deposit limits that reflect their needs. A credit union can keep the current $40, 000 limit if that suits by incorporating it in their rules.
"The increase in the deposit limit will enable credit unions to be more responsive to their members," he said.
"It will go some way to help communities keep their money within their community to work for their community’s benefit.
"The increase in the deposit limit will only affect individual credit unions when they adopt a trust deed and appoint an independent trustee under the Securities Act 1978. This must be done by 30 April 2001.
"I will work with the Securities Commission to give effect to the increase in the deposit limit by Order in Council.
"The new deposit limit will be effective 28 days after the Order is notified in the gazette," Trevor Mallard said.
The Ministry of Economic Development will advise Credit Unions of the terms and implications of the new Order in Council shortly.
"The Government has also agreed to review the tax status of credit unions this year. This review is necessary to avoid any competitive imbalance with other savings and loan institutions over time.
"The possible retention of a tax exemption for small credit unions will be considered as part of the review," Trevor Mallard said.
Credit unions are member-owned cooperative financial institutions set up to provide savings and loan facilities to members. There are approximately 89 credit unions in New Zealand, with total assets over $380 million.