Discussion document released on possible reform of Friendly Societies and Credit Unions Act

Commerce Minister Lianne Dalziel today welcomed the release of a discussion document on options to reform the Friendly Societies and Credit Unions Act 1982.

“Credit unions have traditionally played an important role in helping people save and borrow at reasonable rates. Their tradition of being co-operative, self-help organisations is one the government wants to see continued,” Lianne Dalziel said.

The New Zealand credit union movement is in a period of transition. Today some credit unions have assets in excess of $10 million and engage in a wide range of activities. Their commercial operations bear a closer resemblance to retail financial institutions than traditional credit unions, and a number have ambitions of competing directly with retail financial providers.

"The challenge for the credit union movement is to develop a vision for the future that encompasses the needs and aspirations of its member unions, irrespective of their size," Lianne Dalziel said.

"The challenge for government is to develop a credible and efficient regulatory regime that can meet the distinct needs of small and large credit unions.

"The regime needs to have clear, reasonable standards that will encourage the involvement of unpaid directors and other senior officers. It also needs to foster public confidence in credit unions and encourage innovation and fair competition in the financial services sector."

Lianne Dalziel said the discussion document aimed to advance debate on proposals put forward by the New Zealand Association of Credit Unions.

"These proposals do not represent the government's position. They are a starting point for consultation that will enable the government to adopt appropriate policies."

The discussion document can be found at: http://www.med.govt.nz/buslt/bus_pol/bus_law/credit-unions/discussion/

Submissions should be sent, by February 28, to Kay Brown, Ministry of Economic Development, PO Box 1473, Wellington, or by email to mailto: mailto:kay.brown@med.govt.nz.

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