Credit Union Review re Criminal Justice Act 2013

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Angelab

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Hi I hope someone can answer my question. I have received a request from my Credit Union to give them ID and proof of address along with a letter from my Accountant clarifying that the money I lodge to my Account is from my business and when transferred to my bank account that it is the business account which is what I have been asked for before but this time they are also asking for a copy of my Business Accounts as well which I am not happy about as I don't owe them any money.

Are they legally entitled to ask for the Accounts under the Criminal Justice Act 2013?

Thanks in advance

Angelab
 
Under the Criminal Justice Act 2013 financial institutions have to do what is called enhanced due diligence on higher risk accounts. If you are lodging business cash then there is a risk that you could be using your credit union account for money laundering or tax evasion. The reason they have requested your accounts is to check that the levels of business cash which you are lodging are in line with the turnover in your accounts. This would be a normal check on business accounts for any credit union or bank.
 
Thanks for your reply Elnino but I have a letter from my Accountant verifying that the cash lodgements are in line with my business should that not be enough to satisfy them?
 
No, because accountant's letters have been known to be less than reliable at times and a Credit Union can't rely on them. They need to get a copy of your accounts for their files.
 
From the most recent Department of Justice AML Report for 2015 it was noted:

1. 20% of all STRs were from CUs (assets c. €15bn)
2. 57% from Banks
3. Balance including all the funds businesses and all the other regulated businesses (there are 000s) 23%.


Could you conclude that CUs are over compliant?

Then FATF rated CUs as 'low to medium risk' and banks as 'high risk'

What the CU are doing here is enhanced due diligence whether its justified or not, the reality is CBI 'think' that CUs are risky - that is until FATF concluded otherwise.
 
Thanks for your reply Elnino but I find it hard to believe there are many Accountants that would lie for their Clients. Also the banks have never asked us for Accounts and in fact haven't asked us to update our Identity for years. I agree with WazardDr that Credit Unions are over compliant especially as they asked us only 18 months ago for ID and letter from our Accountant.

I believe this will put people off dealing with Credit Unions as I am seriously thinking of closing my Account.
 
This may be really about bank charges for lodging cash. The credit union doesn't charge the customer for taking in cash but if the cash ends up in the bank they get charged for lodging it.
As a non borrower you may be actually costing the credit union money.
 
I leave my profits in the credit union therefore they have my money to lend out and make interest on.
 
Angelab said:
I leave my profits in the credit union therefore they have my money to lend out and make interest on.
Click to expand...

They have no need for your money and it is actually costing them since pretty much every single one of them is severely underlent with the money they already have.

Some credit unions are a bit hawkish on AML compliance though, but this is largely due to the heavy-handiness of the AML Division of the Central Bank. Their audits would lead you to believe that proof of address and ID are going to single-handedly eliminate tax evasion, as well as being suspicious of anyone that has more than the average industrial wage going through their CU account.
 
@24601 Interesting what you say about tax evasion. Instead of everybody filing a tax return (only 250,000 do so) the Revenue do use this approach to entrap people. The question is - if you had to file a return - would you leave off the 'nixers' or not?

@Angelab I still think the electronic services of CUs are in fact excellent. All I would do is smother them in information about your business - I would even go so far as showing them business records as once they get comfortable they are good partners. It is back to what @24601 suggests is that they may have an over zealous regulator.
 
I lodge small amounts of cash as I have a small business and we are struggling to keep our heads above water and the local office of the credit union know us well and I just feel they are going overboard and I wouldn't necessarily trust their confidentiality so I haven't given them the Accounts but will have to if they insist.
 
Just be aware that if you start lodging your cash in a bank you will be paying bank charges and also there is no guarantee that the bank won't ask for your accounts.
 
Thanks for the advice. I handed in all the information requested apart from the Accounts last Wednesday so will wait and see what happens
 
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