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HM Treasury announces terms of reference for review of Northern Ireland financial mutuals

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Issued 19 February 2009

As announced in the 2008 pre-Budget report HM Treasury, working closely with the Northern Ireland Executive, is conducting a review of the legislative framework for credit unions and industrial and provident societies in Northern Ireland.

The terms of reference are:

1.   To identify the impact of the legislative and regulatory framework on credit unions and industrial and provident societies in Northern Ireland, in particular, to compare the position of Northern Ireland and Great Britain members in respect of:

  • The effectiveness of arrangements for depositor protection.
  • The services that may be offered.
  • Consumer information and education.

2.   To consult stakeholders on recommendations for any changes to the regulatory framework to strengthen member safeguards and structure of credit unions and industrial and provident societies in Northern Ireland.

The review will build on the inquiry into credit unions undertaken by the Northern Ireland Assembly Enterprise, Trade and Industry Committee. It will also consider best practice in other countries.

The Treasury will provide an update on the progress of the review at Budget 2009.

Notes

1. Credit unions and industrial and provident societies with a registered office in Northern Ireland are regulated by the Department for Enterprise, Trade and Industry, Northern Ireland, under, respectively the Credit Unions (Northern Ireland) Order 1985, and the Industrial and Provident Societies Act (Northern Ireland) 1969.  Equivalent mutuals in Great Britain are regulated by the FSA.

2. There are approximately 180 credit unions (with 420,000 members) and 170 industrial and provident societies (with 60,000 members) registered under Northern Ireland law.

3. The different legal frameworks mean that members of credit unions in Northern Ireland do not have access to the Financial Services Compensation Scheme, although the Irish League of Credit Unions and Ulster Federation of Credit Unions both have a savings protection scheme for their affiliated members.

4. Credit unions and Industrial and Provident Societies in Northern Ireland are also more restricted in the range of services which they can offer to members.


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Article Published/Sorted/Amended on Scopulus 2009-02-20 14:36:51 in Business Articles

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